Greetings, and welcome to the Oshkosh Corporation Fiscal 2023 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Patrick Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Thank you. You may begin. Good morning. Thanks for joining us. Earlier today, we published our second quarter results. A copy of the release is available on our website at oshkoshcorp.com. Today's call is being webcast and is accompanied by a slide presentation, which includes a reconciliation of GAAP to non-GAAP financial measures that we will use during this call and is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months. Please refer now to slide two of that presentation. Our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are 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 that we have 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. 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. Thank you, Pat, and good morning, everyone. I'm pleased to report another quarter of strong results for Oshkosh Corporation, with significant growth in revenue, operating income and adjusted EPS compared to last year. For the second quarter, we grew revenue by 17% and operating income by over 200%, resulting in adjusted EPS of $2.69. These results were notably higher than our expectations entering the second quarter as a result of improving supply chain conditions and the benefit of our actions over the past several quarters to improve our production resiliency in a constrained supply chain environment. We are also pleased that both the Access and Vocational segments delivered double-digit operating margins in the quarter. We continue to book healthy orders for our products and innovations and close the quarter with a consolidated backlog of $15 billion. Strong demand is supported by ongoing, robust, non-residential construction metrics, infrastructure spending, mega projects, and solid municipal budgets. During the quarter, we announced our plans to acquire the AeroTech business from JBT Corporation. We are pleased to tell you that the transaction closed today, and we'll talk more about AeroTech in a few moments. In mid-July, we published our tenth annual sustainability report, which highlights our commitment to a sustainable future as we strive to reduce emissions as well as our carbon footprint, while making a positive impact on the lives of our team members, our communities, and most importantly, the people who use our products. As a result of our strong performance in the second quarter and our expectations for continued momentum into the second half of 2023, I am pleased to announce that we are raising our full year adjusted EPS expectations to be in a range of $8, significantly higher than our previous estimate of approximately $6. Over our longer term planning horizon, we expect further growth in both sales and margins, driven by numerous positive factors, which include improving supply chains, benefits from price cost, especially in the vocational segment, bringing new capacity online, introducing new products and innovations, ramping up production of the United States Postal Service's Next Generation Delivery Vehicles, and realizing benefits from acquisitions. Please turn to slide four and we'll get started on our segment updates. Our Access team delivered breakthrough performance in the quarter as a result of improving supply chain conditions and the benefits of our many operational initiatives over the past several quarters to improve production throughput. Supplier on-time delivery exceeded 75% for the first time in more than 18 months, representing continued improvement from the first quarter. That said, we still have some ground to cover to reach our normalized level of greater than 90%. The improved production throughput, combined with stronger price realization, drove a 36% year-over-year revenue increase and an operating margin of nearly 16% in the quarter. Demand for Access equipment remains healthy, and we expect it to continue as we have discussed over the past several quarters. Mega projects, infrastructure spending, strong non-residential construction metrics, expanding use cases, our innovative products, and aged fleets are all contributing to this demand. Orders in the quarter were $1.3 billion, representing a seasonally strong book-to-bill ratio of approximately one to one, with quarter and backlog of nearly $4.4 billion. Currently, we have approximately 50% of our 2024 in backlog, and we are working closely with our customers to slot units for the balance of 2024 production. Our visibility to strong demand for 2024 extends well beyond our current backlog, and we continue to expect healthy demand dynamics and access for the foreseeable future. Work has also begun on the conversion of our 500,000 sq ft facility in Jefferson City, Tennessee, to expand access equipment production. Over the next 12-18 months, we'll be investing approximately $120 million in this modern facility to expand telehandler capacity. The facility previously produced weldments and fabrications for our defense segment. This expansion and our factory of the future modernization activities in Shippensburg, Pennsylvania, provide us with meaningful capacity additions to meet strong demand for our equipment and support our market entry into the agricultural sector with purpose-built ag telehandlers. Please turn to slide five, and I'll review our defense segment. As expected, defense quarterly revenues were down versus prior year, in line with customer requirements. We expect operating income improvement in the second half of the year, with anticipated contract awards and a richer aftermarket mix. In June, we learned that our JLTV follow-on contract protest was denied by the Government Accountability Office. As a reminder, we're still building JLTVs and will continue to do so through the end of 2024 under the current contract. Beyond 2024, we will continue to build JLTVs for international customers, as well as JLTV's specialty applications. These, of course, are smaller quantities. From 2025 onward, we will continue to deliver on many solid programs of record in the defense segment, including FMTV, FHTV, Stryker MCWS, and multiple trailer programs, as well as international contracts that extend well into the future. Long term, we expect that these programs will provide a $1 billion-plus revenue base at mid to high single-digit operating margin. The USPS's Next Generation Delivery Vehicle program is progressing, and our Spartanburg facility is nearing completion. We are currently building and testing design certification vehicles and are on track for a production ramp-up in the second half of 2024. This key program will support a return to profitable growth for defense in 2025. Let's turn to slide six for a discussion of the vocational segment. I'm pleased to highlight that our vocational segment delivered year-over-year revenue growth and exceeded 10% adjusted operating income margin for the quarter. Much like our access segment, we are seeing improved supply chain metrics, but conditions have not yet returned to typical levels, so production output remains constrained. As a reminder, we have notably higher pricing in our backlog for fire trucks to be delivered in 2024 and beyond, which will enhance margins as we enter next year. We continue to execute on both product and manufacturing innovations to drive continuous improvement in refuse and service vehicles as well. Demand for Pierce fire trucks continues to outpace supply, resulting in elevated backlog, and we're working diligently to increase our capacity. We believe our facility expansions in both Appleton, Wisconsin, and Murfreesboro, Tennessee, will help us increase output over the next year. Customer response to our new fully integrated, zero-emission McNeilus Volterra ZSL electric refuse collection vehicle is very high. We expect to deliver two units for customer evaluation before the end of the year. Low rate production vehicle deliveries will start in 2024. We expect to begin ramping up from there over the next several years. Moving to slide seven, the biggest news in vocational is our acquisition of JBT's AeroTech business, which closed today. We already serve the airport market with ARFF vehicles and AWPs. We look forward to welcoming the great team at AeroTech into the Oshkosh family and capitalizing on opportunities for new, attractive revenue streams as we expand our participation in this market. AeroTech is a leading provider of aviation ground support products, gate equipment, and airport services with some of the most trusted brands in the industry. They serve approximately 75% of air travelers at U.S. airports and load approximately 70% of the world's overnight express packages. In short, AeroTech's equipment is found at airports all over the world. They also operate a strong aftermarket parts and service business, with recurring revenues comprising approximately 40% of total revenues on an annual basis. Our combination unites AeroTech's highly engineered product offerings with the strength of Oshkosh's portfolio and technology ecosystem. We share similar innovation priorities across several key areas: electrification, autonomy, and active safety, as well as connectivity and intelligent products. Together, we believe we can leverage best practices, technology, and R&D to advance our shared objectives while capitalizing on opportunities from increased scale. We believe AeroTech is poised to benefit from numerous secular tailwinds for air transportation, which is in the early stages of an investment cycle. Global passenger traffic is expected to grow in the high single digits over the next several years, and infrastructure spending is expected to accelerate with legislation and aging infrastructure. In fact, approximately $25 billion of the government's Infrastructure Investment and Jobs Act has been authorized to fund airport growth and maintenance. With that, I'm going to turn it over to Mike to discuss our results in more detail and our updated expectations for 2023. Thanks, John. Please turn to slide eight. Consolidated sales for the second quarter were $2.4 billion, an increase of $347 million, or 17% over the prior year quarter. The increase was primarily driven by a $351 million or 36% increase in sales at Access, as well as a result of higher sales volume and improved pricing. Sales meaningfully exceeded our expectations as a result of higher production output, particularly at Access, driven by improved supply chain conditions, as well as the benefit of operational actions we have implemented over the past several quarters. Adjusted operating income increased $161 million over the prior year quarter to $237 million, or 9.8% of sales, a 610 basis point improvement versus the prior year. The improvement in adjusted operating income was largely driven by higher sales volume and favorable price cost dynamics, particularly at Access, offset in part by higher incentive compensation costs. Access delivered very strong results in the quarter, with a 15.9% operating margin. Adjusted operating income significantly exceeded our prior expectations as a result of higher sales volume, stronger price realization, and favorable mix. Adjusted earnings per share was $2.69 in the second quarter versus $0.49 in the prior year. This strong result is particularly noteworthy, given we are still facing a constrained supply chain environment, and we have not yet begun delivering the substantially higher priced orders in Vocational's backlog, which we expect to drive notable margin improvement in 2024 and beyond. Now, let's turn to our outlook for 2023. Please turn to slide nine. Over the past few quarters, we have reiterated that demand is strong, but our financial results were limited by supply chain conditions. While our prior guidance assumed modest improvements during 2023, we shared that if supply chain conditions and production throughput improve at a faster pace, we could deliver meaningfully higher financial performance. This is exactly what occurred in the second quarter. We expect the strong second quarter sales and earnings momentum to continue into the second half of the year and beyond, yielding a substantially better outlook for 2023 than our prior expectations. On a consolidated basis, we are estimating 2023 sales and adjusted operating income to be in the range of $9.5 billion and $750 million, respectively, up from our prior expectations of approximately $8.65 billion and $570 million, respectively. We are estimating adjusted earnings per share will be in the range of $8, up from our prior estimate of adjusted EPS in the range of $6 and prior year adjusted EPS of $3.46. At a segment level, we are estimating Access, sales, and operating margin to be in the range of $4.9 billion and 14%, respectively, up from our prior estimate of sales and operating margin of $4.4 billion and 11.5%. Turning to Defense, we expect sales and adjusted operating margin to be in the range of $2.1 billion and 3%, respectively, for the year. We expect vehicle orders to drive improved results in the second half of the year. We expect 2023 Vocational sales and adjusted operating margin will be in the range of $2.5 billion and 7.25%, respectively, versus our prior expectations of sales and adjusted operating margin of approximately $2.2 billion and 8%. To be clear, the reduction in operating margin expectation is a result of the initial purchase accounting and deal amortization related to the AeroTech acquisition. This updated guidance includes the AeroTech business for five months, including sales of approximately $300 million and an immaterial amount of operating income, again, because of initial purchase accounting and deal amortization. We continue to expect that AeroTech will be accretive to operating income and EPS in 2024. Our vocational expectations also reflect higher new product development spending and facility ramp-up costs for the Volterra eRCV program in the second half of the year versus the first half of the year. Our estimates for corporate expenses, tax rate, CapEx, and average share count remain generally in line with our prior expectations. Our expectation for free cash flow is now approximately $200 million, down from our prior estimate of $300 million. The change is driven by a combination of anticipated higher receivables at year-end, resulting from higher sales, as well as the timing and amount of NGDV related startup investments compared to prior expectations. Looking to the third quarter, we expect consolidated sales to be up modestly versus the second quarter, primarily as a result of AeroTech sales. We expect earnings per share to be in the range of $2.15, which is lower than the second quarter as a result of increased interest expense on a revolving line of credit facility associated with the AeroTech acquisition and lower interest income as a result of lower cash balances as well as product mix and Volterra eRCV facility spending in the vocational segment. I'll turn it back over to John now for some closing comments. We delivered a strong second quarter as a result of better than expected supply chain and production throughput. We're executing well and are increasing capacity in our access and vocational segments. Our backlogs are robust and demand continues to be strong. We just closed on the company's most significant acquisition in more than 15 years. Finally, we raised our expectations for 2023 significantly and expect that our strong momentum will carry into 2024. This is a very exciting time for our company, and we are confident we're taking the right steps to build on this momentum to drive growth and enhance shareholder value. Okay, Pat, let's get started with Q&A. Thanks, John. I'd like to remind everyone to please limit your questions to one plus a follow-up, and please stay disciplined on the follow-up question. After that 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. Thank you. We will now be conducting a question and answer session. Again, we ask that all callers limit themselves to one question and one follow-up. If you have additional questions, you may requeue, and those questions will be addressed, time permitting. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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 keys. One moment please, while we poll for questions. Thank you. Our first question comes from the line of Tami Zakaria with JP Morgan. Please proceed with your question. Hi, good morning. Thank you so much. Excellent results. I have two quick questions. The first one is on the backlog, which continues to climb. Can you give us some color on what price versus volume impact was on, on the growth of, of that backlog number? Tami, you mean on, on new bookings during the order or during the quarter? Correct. Correct, correct. What I would say is, in general, again, pricing, we've talked a lot about on the vocational segment, that we have that strong pricing and backlog that we're still not realizing the full benefit of, expect to realize that in 2024. I guess, as we look at the rest of the company, again, continue to expect solid pricing in there. Again, we expect to continue to deliver strong margins going forward and the pricing's commensurate with that. Got it. Second question on AeroTech. Can you remind us of the cadence of the $20 million synergy savings that you expect by 2025, and how much that should accrue to, let's say, the gross margin line versus the SG&A line? You know, we haven't really. It's really going to be sort of a steady flow over the next two years. I think certainly some impact. I think the way to think about AeroTech is, you know, this year we'll have. We'll get through the initial purchase accounting. We'll have to go through a step up in bases of inventory. When we look to next year, we think it's going to be about a $700+ million revenue business, would expect around $0.40 of EPS accretion, understanding that there's going to be some interest income or expense impact embedded in that $0.40. Solid double-digit EBITDA margins is what we're thinking about for next year, and we would expect improvement beyond that as we get more synergy benefits. Yeah, Tami, it's John. I'll just add a little bit more color. We, we said that we're going to get about $20 million in synergies, as we go forward, and that comes from G&A synergies, of course, that's with anytime you make an acquisition, you're getting those types of synergies. That'll come sooner than later. We've got supply chain synergies, we've got channel-related synergies, that'll take just a little bit longer. I think you'll see this unfold over two or three years. Got it. Thank you so much. Thanks. Our next question comes from the line of Mircea Dobre with Baird. Please proceed with your question. Yes, good morning. Thanks for taking the questions, and congrats on a very good quarter. My, my question is on vocational, and on the fire business specifically. You commented on, on demand exceeding supply for fire trucks. Maybe you can give us a little more context as to how you see that progressing as you look at 2024. For fire specifically, this is where I know you had quite a bit of supply chain challenges. How, how are you seeing that progressing? I'll talk a little bit about that, Mircea. We, we see the demand for our fire trucks continuing for, for the foreseeable future, and that is primarily due to a couple of things. It's due to the fact that municipal budgets are healthy, and they're prioritizing things like critical fire trucks in their fleets. They're also prioritizing fire trucks because they want new technology. We've got a lot of municipalities that are lining up for things like our electric Volterra fire trucks. The second thing that's driving it, though, is aged fleet. We've talked about this for a little while, but there's a significantly aged fleet of fire trucks across the country. That's another reason we expect demand to be strong for the foreseeable future. We continue to see a really strong backlog that gives us the confidence to continue to put more capacity in place. We're doing that right now. We've been doing it in Appleton, Wisconsin, and doing a lot of Industry 4.0 things with automation in our facilities that we haven't had in the past to improve throughput. We're doing it in Murfreesboro, Tennessee, in a brand-new state-of-the-art plant, where we're gonna do some production for fire trucks as well, which should allow us to deliver fire trucks faster, and that's good for us. It drives really good, healthy growth. Understood. My follow-up on, on defense, I, I appreciated the comment that, you know, the remaining programs give you some visibility and $1 billion worth of revenue. I'm sort of curious as to how you're thinking about any restructuring or, or any adjustments that you need to make to your existing footprint or cost base in order to be able to deliver that mid-single-digit to high-single-digit margin range on that revenue. Thank you. Yeah, I'll, I'll kind of give you the, the main context of what's going on in defense. I'll, I'll take you back a few years, as we've talked about this a little bit. We've known for a while that tactical wheeled vehicles are under pressure from a Department of Defense budgetary standpoint. We've said, "Hey, we've got to move into some adjacencies like combat vehicles and like last-mile delivery vehicles for the government." Well, combat may not be as big as last-mile delivery, these are really important programs for the future of our defense business. If you go to the to the current business, the FMTV, the FHTV, the Stryker MCWS, that's as we said, that's all gonna provide over $1 billion of base business, and we'll deliver mid-to-high single digits on that business. As I talked about in my prepared remarks, we've already converted one defense operation to access equipment. We'll be producing JLTVs in the current plant through the end of 2024, so it remains to be seen exactly what the the outcome of that operation is. We're a healthy, growing company. We have a need for more capacity, and we'll let you know how we're going to change the business as we go forward when the time comes. Thanks Nick. Thank you. Good luck. Our next question comes from the line of Stephen Volkmann with Jefferies. Please proceed with your question. Hi, good morning, guys. I wanted to ask about the access margin, which is obviously very impressive. It sounds like there's still... John, I think you mentioned something like 75% on-time deliveries from suppliers. Normal is more like 90, so I'm guessing there's still some kind of productivity inefficiencies in that 16%. Is there any way to think about what that would look like if supply chain was normal? Hey, Steve. I'll, I'll start with that, and if John has anything to add in, he certainly can. Bottom line, it was a very good quarter. I think couple of things, I think, to understand the quarter, first of all, obviously we're from a volume throughput perspective, we saw improvement. We had a very, very strong mix in the quarter, too, and that certainly benefited our margin in the quarter. The mix, the next two quarters, while very solid, is not quite to the same level. We did have a lot of large booms in it. I would say while on-time delivery metrics are still not back to historic norms, a lot of activities we've, we've done are, are really having a big impact, including carrying a little bit more inventory, and that, that is helping. We're starting to see that, that manufacturing labor efficiency, come back. I think there's, there's certainly continued opportunity, but I think great, great mix, great results for the quarter, and, you know, excited to continue the momentum. Steve, I'll just add a little bit to that, a little bit of a shout-out to the access team. You know, we've been, we've been in a really constrained environment for quite some time now, we have had enormous amounts of effort to, to determine how we can operate more efficiently in a constrained supply chain environment. A lot of engineering hours have gone into this, working with our supply base, to figure it out. We've gotten a lot of improvement in efficiency because of that work. I think that that access team would be the first ones to tell you that as the supply chain continues to open up and go from, say, 75 to 90, they'll definitely benefit even more from, from that improvement. Great. Okay, that's what I thought. Then the related follow-up, I think you said 50% of access in 2024 is in backlog already. Just any commentary on sort of price cost expectations on that part that's already in backlog? Yeah, I'd say overall, you know, we're, we're, we're sort of back in that price cost balance. We were behind, obviously, for this past year, and had challenges, so that's, that's in, in balance. You see the strong margin this quarter, so I'd really focus on the margin next year and the comments that John and I just made. We expect strong margins to continue in the future for access. Super. Thank you, guys. Our next question comes from the line of Timothy Thein with Citi. Please proceed with your question. Thank you. Good morning. Just, just to continue on that, that thought. Just on access pricing in the first quarter, I, I believe it was up kind of low teens.... Is the revised guidance for this year, does that and the expectation like most and, you know, others, that year-over-year change moderates as we go through the year? Did that change those are, you know, in tandem with the revised full year revenue guidance for Access? I think to the extent where we got some more, where price was a bit of a driver this quarter is because our volume was higher, so with, with more volume comes more price. Yeah, we were still. I think ultimately we're, we're largely there from what we've implemented from a pricing perspective. There was, in Access. There was still some lag even in the first quarter. I think really this is the, the, the pricing that we see right now is what we expect, for the balance of the year. Okay. Okay. Then, Mike, maybe just, I guess a bit more big picture, just on vocational. A lot of talk about, you know, the, the, the pricing you have in the background, but and, you know, you layer in a lot of moving pieces as we go into, into 2024 as AeroTech ramps up. You have the full year with the mixers out of the portfolio. You know, it's a lot of these, these factory inefficiencies that have been a headwind, presumably, you know, or less of a, a headwind. Any kind of handholding you'd give? I know it's, it's early, but just as kind of a guidepost to think about vocational- Yeah margins in 24? Yeah, I-- you know, we're not going to provide guidance, as, as you said yet at this point, but I think the things to look at. You have the sort of the base or not, the, the legacy vocational business, if you will. We talked about the strong margin profile we expect next year in that business, with the pricing coming online. Certainly, the supply chain improves, we would expect volume to increase. That's similar to what we talked about last quarter. We see some strong dynamics. Then you bring on the, the great AeroTech business that we're very excited about, and that's going to be a business that, that we expect, again, is gonna be, sort-- solid, solid, you know, you know, mid-double-digit type EBITDA margins. We will have a burden of some amortization that, that plays into, into the margin profile in, in the segment. That, that's really, some, some data on how we view, next year. I think. Thanks ... and what's really exciting about this vocational business is some of the investments we've made in the products. You know, you, you look at the electric Volterra fire trucks, the airport rescue and firefighting vehicles, which are electrified. You look at the new electric refuse collection and recycling collection vehicles. There's innovations on IMT's product. This is gonna drive really strong growth for years into the future. We're just, you know, we're in inning zero on these new products. It's really exciting. Good stuff. Thank you. Thanks, Tim. Our next question comes from the line of David Raso with Evercore. Please proceed with your question. Hi, thank you. Sorry for a little minutiae modeling question here, but just trying to figure out the vocational margins the second half of the year, right? They're down to 5.6 after 9.2 in the first quarter. I understand the acquisitions weighing on that, including, you know, maybe some amortization from the deal. Just zooming out, I'm trying to figure out why the third quarter EPS declines as much as it does sequentially. There's a indebted, you know, what interest expense are you assuming in the model here so we can get there? Then the fourth quarter, the implied EPS is similar to the first quarter on similar sales, and base case, you would think the margins would be better on similar, similar sales fourth quarter versus first quarter, right? Given all the supply chain and so forth. Again, vocational is weighing it down. There's a lot there. I guess, A, can you help us with the interest expense? B, am I looking at the vocational margins correctly in the second half? C, the third thing is Access. The fourth quarter is when a lot of the rental companies have the big decline in their CapEx year-over-year. Maybe if you could help us a little bit with the cadence of Access, maybe better help us understand the fourth quarter with Access. There's a lot there. I apologize. Okay. I'll try to remember everything- Please do. I'll let if I forgot something, let me know. I guess number one, from an interest expense, think about the, the, the borrowings on our, our revolver in that $550-$575 range. We'll carry interest on that. I would expect some pay down over the course of the year. That's, that's essentially what we'd expect and, you know, obviously close today. I think that's as we look, that is, I, I think the, the really the two biggest bridging items or two bigger bridging items from, from Q2 to Q3 is looking at interest expense. Conversely, we've been carrying cash balances, so there's also interest income that we're not going to see at the same levels. That's going to carry into the fourth quarter as well. I would say that's, that's sort of the background there. As we look to vocational, I think certainly we're going to be picking up amortization. We just closed today, so we need to get through the valuation and the purchase price allocation. The key things that we know is we're going to have some depreciation and amortization on that, that volume. We also know the nuance of purchase accounting is that you typically are going to have a step-up in basis of inventory that's on hand, particularly finished goods. We believe that finished inventory levels or inventory levels in general are going to be a bit higher than our previous expectations. There's a step-up in basis that's just sort of a temporary phenomenon that plays into the margin. We also said, really finally, we're making, as John said, some significant investments in the segment for our electrification efforts. We do see higher spending sequentially in the back half of the year on the McNeilus eRCV product, both for the new product development effort, as well as for getting that facility ready for production. Those are really the big moving pieces. In terms of the volume in the fourth quarter, it literally, and we've signaled this on previous calls, it completely comes down to, in this very strong demand environment, the number of production days you have in the quarter. With the holidays, there's fewer production days, and that's, that's what drives it, is, is the fewer production days and then as well as the other items that, that we've talked about. Was that an Access comment? because essentially, your backlog is so large, you would argue, you know, we don't need much by way of orders to ship well on Access in the fourth quarter. obviously, some of the rental companies are saying, "Look, we, you know, we, we don't wanna take as much in the fourth quarter as we did last year." I'm just trying to level set everybody the cadence for Access- That doesn't have anything to do with it. That doesn't... Yeah, that doesn't have anything to do with it. Okay. It's purely everything that we produce right now, we're shipping, with the exception of stuff that's in transit on, on the water between our facilities, essentially. It's really a function of fewer production days yields lower revenue. It has nothing to do with demand or, or delivery cadence to our customers. Thank you very much. By the way, that comment, all the comments apply both to access, it also applies to vocational and defense. There's just simply fewer days. With fewer production days, you have less manufacturing absorption, so there's, there's all the implications of just- and that's, that's typical. That we, we typically see that in our fourth quarter. Thank you. Thanks, David. Our next question comes from the line of Jerry Revich with Goldman Sachs. Please proceed with your question. Yes. Hi, good morning, everyone. Morning. Morning, Jerry. I, I'm wondering if we could just talk about the margin opportunity in fire and emergency. Pre-COVID, you know, you folks were running mid-teens margins on the way to high teens, and I'm just wondering, with the price increases that you have in backlog, are we back at that path in 2024, Mike, or, how are we thinking about getting back to the levels of outstanding performance that you folks were at pre-COVID? As we look at that, you know, and we're not... I guess for core fire trucks, we've talked about it. Mm-hmm. The margin, there's no reason why our products don't get back to pre-pandemic levels with the pricing we have. We, you know, we need to get to that higher price backlog, and as supply chain continues to improve, we'll get the throughput. We've talked a lot about the AeroTech impacts, those strong EBITDA margins will have less some D&A that will be, or depreciation and amortization, will be present. Again, we're very confident, as we've said in our analyst day targets and so on, that this is a business that over time, is a solid double-digit segment. We're excited about the growth prospects. Super. You know, you folks have some great analytics with your telematics installed base. I'm wondering if you could just tell us for access equipment, it seems like the used equipment inventories are tighter than for other equipment categories. Can you tell us what the utilization numbers look like year-over-year in terms of operating hours per unit in North America and Europe? Or are we at a point where that's flat to up year-over-year, or can you just give us context on what you're seeing in the data? Well, what I can tell you is that the metrics are still healthy in terms of utilization metrics. We pay very, very close attention to it. Now, one thing that I think you, you may notice is last year, at this time, we were under the industry. I'm talking about the whole industry, but certainly us, JLG, we were under a constrained environment. We were really not able to ship as many products to our customers as they wanted. This year, the industry is doing a better job of getting products into the hands of customers because customers need the products. You, you would see a little bit of normalization happening, and that's a really good thing. It's a good thing because it means that our customers can, can continue to grow their fleets because they need to grow their fleets, but it's also a good thing because you'll start to see a gradual replacement of older fleet, and I think you're, you're starting to hear some, some customers talk about that. Even with the more fleet coming into the market right now this year versus a year ago, the utilization metrics are still very healthy, and I think you hear that in remarks from our customers as well. Super. Thank you. Thanks, Jerry. As a reminder, if you would like to ask a question, press star 1 on your telephone keypad. Our next question comes from the line of Nicole DeBlase with Deutsche Bank. Please receive with your question. Yeah, thanks. Good morning, guys. Morning, Nicole. Morning. maybe just with the supply chain, you know, that was obviously a source of upside for you guys this quarter from a volume perspective. What have you embedded in the second half? Have you embedded continued progress on supply chain with constraints reducing, or have you kind of flatlined what you've seen in the second quarter? At this point, Nicole, similar to what we've done in, in our previous guide, our expectation is that it's largely similar to how we exited this quarter, so it really comes down to the number of production days that we have in the subsequent quarters to the extent that we're varying volume. Okay, got it. Makes sense. Then on price cost, can you just talk about like, is this quarter, are you seeing kind of the pinnacle of price cost tailwind from a margin perspective? You know, is the price cost tailwind that you expect in the second half of the year comparable to what you're seeing or what you saw in the second quarter? The one thing I would say, first of all, just to caution, it's a price cost year-over-year is favorable, but it's really in balance again. It's not, so that the extent that we were behind last year, now we're towards neutral. I would say, you know, similar in most of our businesses, that we should see similar price cost dynamics the remainder of the year, with the exception, you know, a portion of vocational with the fire trucks, that there's still more pricing to come, more meaningfully next year, to get them back in, into full balance. Thanks. I'll pass it on. Our next question comes from the line of Seth Weber with Wells Fargo. Please proceed with your question. Hey, guys. Good morning. Wanted to ask about defense margin, a couple of questions. The, I guess your full year guide implies, you know, second half, kind of ramps back to that single-digit range, I think. Then I, I guess I'm just trying to understand whether you changed your kind of, you know, kind of medium-term margin guidance. Now, it seems like now you're kind of mid to high single digits. Is, is that a moderation from before? Is that just purely a reflection of JLTV going away? And does that include the USPS ramp? Thanks. Sure. First, first of all, just from an expectations perspective, as we said in prepared remarks, our expectations, we do have, we do expect some orders in the back half of the year that will, that will help- that, that will generally produce positive estimates at completion or EAC or CCA adjustments. That's, that's a bit of the improvement. We also have a stronger aftermarket mix in the back half of the year. There's some mix and orders at play there. I think that in terms of just the mid to high single digits, that is just what you would consider the tactical wheeled vehicle or sort of a core defense business, excluding NGDV. NGDV is obviously a big multibillion-dollar program that's additive. Just isolating that, that, just the defense piece of it, it's a +$1 billion. We're not saying that's really post JLTV. Think sort of 2025 and beyond is how you should think about that +$1 billion at mid-to-high single digits. Okay, that's helpful, Mike. Thanks. Then just on the access strength, can you just give us any regional color as to what's going on? You know, North America, we assume, is strong, but any trends that you'd call out in, in Europe or China? Thanks. Sure. I mean, we've seen actually pretty healthy growth rate globally. I think maybe domestic China is one area that we haven't seen growth. We've seen a little bit of contraction, but everywhere else in Asia has been really strong. Europe is has been really, really strong for us, surprisingly, perhaps. We see continued strength across the access markets going forward. You know, I can't stress that enough. We pay attention to, to a lot of metrics, and we, we work really closely with our customers, and our customers are really good at forecasting what's happening in the market. If you look at the aggregate of non-residential construction metrics, and we don't just look at it for this year and next year, we look at it over five years, and it's really, really healthy. The Dodge Momentum Index is still up at a high level, and the ABI is above 50 still. Those are all very positive indicators, and we all know about the CHIPS Act and the IRA, and some of these other bills that have been passed that are spawning these mega, mega projects. It's all pointing to continued healthy growth in the access equipment markets for the foreseeable future. Got it. Thank you, guys. Thanks, Seth. Our next question comes from the line of Steven Fisher with UBS. Please proceed with your question. Thanks. Good morning. Just to, to follow up on that, maybe can you just talk about how broadly the orders in the access business were spread around the customer base in North America? I think there's some concern that some of the larger customers are perhaps a bit more cautious based on some of their CapEx messages for later this year, and maybe the rest of the industry is gonna add too much fleet. I guess I'm curious, what was the breadth of the orders in the quarter, and kind of your reaction to the concern about the rest of the industry adding too much fleet? you know, what we're continuing to see is very strong demand, and that's with our, our larger customers, as well as independent rental companies. you know, solid, solid mix of orders across the board in the quarter. I think it's, it's even beyond just the orders we had in the, in the quarter, Steve. We have, we have really good visibility to requirements, even beyond our, what's actually booked, and, and we'll continue to book those orders through the back half of the year. our, you know, our, our, our visibility demand is, is, is very, very solid for next year, is what I can say. Yeah, I'll, I'll just add to that. I don't think you see too much fleet in the market. I think it's just the opposite. I think the reason you see, the used market and the condition that it's in, it's, it's because there's, there's so much demand for equipment that our customers who have aged fleets can't really replace that fleet, so they're not selling off any of their old fleet 'cause they need it. Mm-hmm. They haven't even started, just barely, maybe just barely started fleet replacement. Mm-hmm. I don't think that there's too much fleet in the marketplace. Okay, and you may have addressed this in some of your earlier comments about pricing, but there's obviously some messaging from some bigger customers last week about reversing surcharges and discounting pricing for next year. I guess I'm curious, what, what's your reaction to the suggestion that the pricing will come down next year? You know, maybe if we're starting at a margin percentage of close to 16%, it doesn't matter so much at this point, but I'm just kind of curious what your reaction to that is. Yeah. First of all, I'll tell you that we've got really, really strong demand for our products. I mean, we're booking orders for the second half of 2024 right now. We've never had this kind of really good visibility in Access in the past. The market is very strong, and the demand is very strong. Now, with regard to pricing, we're always open, and we are always fair with our customers on how we price our products. I, I wanna make, you know, just make sure it to make a specific point, is that input costs are still very, very elevated. When you look at it in aggregate, input costs are very elevated. You see inflation moderating recently, we haven't seen PPI and other metrics deflating. You know, we haven't seen deflation. You can pick at one thing here or one thing over here that you may have seen some relief on. Overall, input costs are very elevated. We've got good demand. We'll always be open and fair with our customers as to how we price, we price our product. Very good. Thank you. Thanks, Steve. Our next question comes from the line of Steve Barger with KeyBanc. Please proceed with your question. Hey, thanks. Good morning. Good morning. Morning, Steve. John, you sound great on visibility right now, and you just took this year's guidance above where consensus is for next year, and not far below 2025. Yeah. You know, you've alluded to a lot of this, but without getting into numbers, can you talk about how you're thinking about a multiyear growth path from this updated guide? Or should we be thinking about a flattening out at some point from a high level, you know, as we think out five or six quarters? Just trying to gauge your, your ability to grow from here. First thing I'll, I'll mention, Steve, is, you know, as, as we look at the quarter we just reported, you know, we're very, very pleased with it, but we are not surprised with it. I mean, what's happening in this quarter, we knew was going to happen. It's just happening a little bit faster than we had previously forecasted would happen. We always knew this performance was there, and that's why we never, ever came off our 2025 Analyst Day guidance. We always maintained that, yes, this is what we see achieving in 2025, and we still see that today. We still see a lot of tailwind in our business. We talked about demand in the access segments, not just in North America. It's, it's really nice global demand, but then we've got the vocational business, which is really just starting to pick up momentum, and, and we see the opportunities to drive big margin improvements in 2024 with that business. A lot of new product. We've got new acquisitions from Hinowa to, to AeroTech, which are gonna provide benefits for us. The postal contract comes online next year. You know, these are all reasons why we never came off 25. We believe the 2025 guidance is appropriate for our business. Understood. That's, that's great color. Thanks. Then when you get to run rate production on the Volterra, how will that margin compare to a traditional RCV? Where do you think the mix of electric versus ICE goes over time, not just for Volterra, but, but for any product where you have an electric option? Well, I think it's gonna be different depending on the end market. You know, for example, I'll give you an example with the Postal Service, 'cause that's been relatively public. The Postal Service started with only 10% of their orders, BEV units versus ICE units. Now, a very short time later, they're at 75% BEV units versus ICE units, right from the beginning. They've accelerated it dramatically before we've even produced and delivered unit one. I think. Some markets, you know, will be a little bit slower. The fire and emergency, there's a lot of customers extremely interested in our fire and emergency fire trucks that are Volterra. You know, the average fire truck stays in the market close to 20 years, the growth that that'll drive will run for a long time. There's also a lot of interest in our RCV products. Mm-hmm. So that's gonna run for a long time. I, it's kind of hard to predict just how fast, fleets will electrify. But, I will tell you that every time we put an electric unit into the market. Mm. It's a higher price point. There's good total cost of ownership for our customers, and there's really healthy margins on these products. Steve, one other, one other exciting thing. I think if you start thinking about the eRCVs, you really need to almost think about more like our Pierce custom fire trucks, where, you know, in a lot of cases we're not actually buying the chassis, but now we're gonna be participating as volume ramps in those on, on really the entire truck including our, our, our, our purpose-built chassis. That's, you see the margin profile and the opportunity that we see on fire trucks historically, and that's, we, we view it, it, it very much in a similar vein. Understood. Just to follow up to my first question, to confirm, the EPS range for 2025 was $11-$13. Is that right? Yeah, that's right. Got it. Okay, thanks so much. Thanks, Steve. Mr. Davidson, we have no further questions at this time. I would now like to turn the floor back over to you for closing comments. All right. Thanks, Christine. Thank you for joining us today, everybody. We're pleased with a very strong first half of 2023, and that our operations and supply chain metrics are continuing to improve. Before we end the call, I'd like to highlight our plans for a field trip to meet with access segment management and tour our JLG factory in Shippensburg, Pennsylvania, on August 23rd. For investment professionals who are interested in seeing our world-class manufacturing operations up close and have not yet made plans to attend, please reach out to Victoria or myself, and we'll be happy to get you the information. Thanks, everybody, and have a great day. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.