All right. Looks like we made appropriate timing. So thanks everyone for joining us. My name is Angel Castillo. I'm the machinery analyst here at Morgan Stanley. It's my pleasure to be joined today by Amy Campbell and Drew Konop from REV Group. So appreciate the time. Before we dive into some of the Q&A, just want to start with a quick disclaimer that we have to read. So for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com forward slash research disclosures. If you have any questions, please reach out to your Morgan Stanley representative. So Amy, again, thank you for joining us today. Sure. Would love to just start with maybe a quick little overview for those that may not be as familiar with REV Group, you know, just in terms of, you know, who is REV Group? Sure. Yeah, so REV Group had historically been a business separated into three segments that we consolidated down to two earlier this year when we divested our Collins Bus business earlier in the year. And so we have two segments. One is called Specialty Vehicles, which has the primary businesses in there is our fire and emergency business, fire trucks and ambulances, fire apparatus and ambulances. And then smaller businesses, we have a terminal truck and street sweeper business, but that's a small, kind of, high single-digit% of that total portfolio. And then this year, the municipal transit bus business is still a component of Specialty Vehicles, but as we announced when we exited Collins, we're also exiting that municipal transit bus business. And so, we will ship the last buses out of ENC, which is headquartered here in Riverside, California, here in the fourth quarter. So that's about 75% of our portfolio, our Specialty Vehicles portfolio. And the other 25% of our portfolio is Recreational Vehicles. Mm-hmm. Mostly motorized. We cover Class A, Class B, and Class C motorized vehicles, and then we have a small camper towable business branded Lance, that's also a piece of that. Mm. - portfolio. Perfect. No, that's a, that's a great place to start. And you mentioned maybe, you know, the way you talked about it. So again, Specialty Vehicles, that's, you know, particularly the F&E business, that's been a very much core and an area that you, you know, you're a market leader within. So maybe just start there. As we think about, you know, had great performance over the last few quarters and great kind of trajectory into that double-digit margin- Mm-hmm. Place. So we just want to unpack that, what you're seeing a little bit more. Maybe at a high level, how are you seeing demand unfold? I think that's an area, particularly within fire apparatus, is where the backlogs are out, you know, two, three years. Yep. Are you seeing that slow down in terms of, you know, how much you're kind of still receiving orders, versus, you know, the last couple of years? Yeah, so let me step back. Mm-hmm. So, you know, if you look back over the history of fire apparatus sales, they have historically, you know, been, we said, around 4,000-4,500 units in the fire apparatus that we participate in. And that's been a pretty historical average. It's not a very cyclical business. We did see a spike in demand coming out of 9/11. Mm-hmm. So 2004 to 2008, the industry saw high demand. And then, as the fire and ambulance business is largely funded through municipal funding, post the Great Recession, when property values dropped, and municipalities had some more funding challenges, we saw a period of decline there, kind of, call it 2009 through 2012. And then we've recovered from that back to that kind of 4,000 to 4,500 units. And then and during the pandemic, 2021, 2022, 2023, we saw demand go back up, closer to that 6,000 units above kind of historical demand levels. Now, I would say, speaking of both fire apparatus, but also ambulance- Mm-hmm ... we have said we expect demand to start to normalize. And we have seen some normalization further along in our ambulance segment than it is in our fire truck segment, but there is starting to see some normalization there. We continue to see good book-to-bill, though, with the book-to-bill of 1.0 in terms of units, and the year to date through the third quarter on 1.3 in terms of dollars. Fire's a little ahead of that. Mm-hmm. So it's continued to see strong demand overall. And we think some of that comes from just the quality of our brand, our dealer network, as we're continuing to see good demand here through the cycle. Yeah. No, absolutely. And, and maybe to, to that point, could you just talk about, you know, where aged fleets after, I guess, this wave that we've had, will that kind of get the replacement cycle and, and the aged fleets in a kind of better place? Or is there still, you know, pockets where you see that again, as we get into 2027, 2028, people are just saying: "I don't need to put the order in today, but I will do eventually replacement around 2027, 2028? Yeah. Just what's kind of the shape of that? Yeah, I mean, it- Mm. I think it's difficult to predict, right? There's the number of fire departments across the U.S., you know, very dispersed, from small, rural, volunteer fire communities, you know, where their equipment will get much age. But I think I saw a metric that 40% of fire departments are in communities with less than five thousand people, to large cities who are on a regular replacement, cycle. So as we look at that replacement cycle, you know, I would actually think that what we're seeing right now is customers, you know, they're working through their municipalities. They're having to get votes by the city councils and the village councils to get these approved. And so I don't think you're seeing people hold back on orders because there hasn't been any signs that we're gonna see the backlog come down. So if they know they need a replacement of that fire truck in the next few years, I suspect that they're working on those orders right now and taking those out to bid. ... Yeah, and maybe just to kind of continue on the backlog dynamics, I think one very, you know, interesting kind of part of the narrative for REV Group is just how, what that backlog ultimately means. Yeah. Right? It's not just purely volume, it's also the fact that you're able to get, you know, better price- Mm-hmm. Better margin on some of that kind of product that's down, you know, over the next few years. Can you just describe that? You know, how are you seeing perhaps your ability to continue to drive incremental pricing on those incremental orders? Those incremental orders? Yeah. Sure. So, you know, we've talked about, we took nine price increases, from the start of 2021 through the end of 2023, for a cumulative price increase of 40% over that time. And we are in fire and ambulance or, excuse me, fire, probably in the fourth or fifth inning, about halfway through those price increases, and in ambulance, the fifth or sixth inning. So we still have significant price to harness in the backlog, you know, halfway through in fire, and maybe a little bit more than that, in ambulance. But we still continue to take price increases. So we announced another annual price increase, this year, and I would expect that to continue. So a combination over the next couple of years, as we harvest the price that's in that backlog, that's secure, right? These are encumbered funds from municipalities, so those orders are secure. Mm-hmm. We'll drive those double-digit margins up, and then the next wave of margin expansion will come from efficiency and throughput improvements, simplification efforts that we have across the portfolio. Now, then, and that's a good segue, I guess, as we think about the margins. So you've already achieved your double-digit target, right? Mm-hmm. But what's maybe, you know, as we get through to, let's fast-forward to 2026 or so. Mm-hmm. What do you see as kind of the normalized or structural margin of this business longer term? Because as we see it today, it seems like the backlog alone has just this continued, you know, Yeah Step up in margin, through the next few years. Yeah, so I would say we haven't achieved our target. We achieved the first step, which is double-digit margins, and then now we step through those double-digit margins as margin expands, and so over the next few years, that price, we expect to largely drop through to the bottom, to the bottom line. You know, we think we can get our margins to be, you know, competitive in the marketplace with others that compete in this marketplace, and so as that price drops through, obviously, there'll be some inflation, but we drive our teams to offset that inflation through purchasing initiatives, through labor efficiency initiatives, and VAVE, and Lean, and OpEx, and so as we drive to offset those inflationary headwinds, for the most part, we expect that price to drop through. And so we should see, you know, continued margin enhancement here just from price for the next two and a half years as we work through that backlog. And then on the other side, as I said, you know, starting to take advantage of simplification initiatives, which are kind of really in the early days right now. Yeah. No, and that's actually perfect because I wanted to ask you about simplification, right? Yeah. Because I think that's something that's maybe a little bit of a heavier lift, and maybe almost takes the baton- Mm-hmm from the pricing as we get to the- Yeah You know, the back of the backlog or the end of the backlog. You know, in terms of really seeing the benefits of, you know, every aspect of your strategy around simplification. So if you could just unpack that a little bit more. Yeah. You know, what, what investments or changes do you need to make to your business? And what, how quickly can we start seeing that flow through in terms of the P&L, in terms of the margin? Yeah. Mm-hmm ... multiple elements of it. I mean, we think about three key pillars of simplification: rationalization, standardization, and process optimization. And the businesses are at different points in their cycle through that. So one is rationalization, and, you know, that is taking stuff. So, you know, we may have 27 options of door handles that you could order on a fire truck today, and looking at 80/20 and reducing that down to, you know, three to five options, and taking complexity out of assembling those door handles on a fire truck would be one example of rationalization. Standardization, you know, is looking at standard door designs and how a door is assembled into a fire truck- Mm-hmm so that there's more consistency and more efficiency for an assembler to put that together. Looking at our engines, we right now have our engine configuration so that we cannot swap them between different brands of fire trucks. Mm. And so making sure that we're engineering and designing in a consistent configuration, so that if one plant has got a supply problem, it can help support another plant that doesn't. So some of that is standardization. Also standardizing options. So one of our ambulance plants has implemented what they call a yes, but, where "Yes, we'll do that, but we need to go back and understand what the implications of that are for complexity, and do you wanna pay for that complexity, or this is - we think this is a better- Mm-hmm ... a better option?" And then process optimization, as you do that, really, this standardization starts. It starts with the design options that are available, and then it works all the way through as you're quoting. It really starts there, quoting to the customer, you know, all the way through ordering parts and then assembling. So we've seen, in terms of process optimization, where our S180 fire truck, which we talk about, which has got six to nine month delivery time, the time to engineer those orders has gone from an average of 200 hours a truck to 20 hours a truck, 'cause there's such fewer options to deliver. So it's kind of across that spectrum. We talked about the S180 is probably largely where we expect it to be. Ambulance is much further along on this journey. And then fire trucks, a lot of our fire truck brands are really early days and starting that rationalization, standardization of parts and ability to configure to go forward. I do wanna stress, though, that we still are, and we still will be a custom fire truck business. So it's finding that right balance, driving customers to you know what makes sense, taking out non-value-added stuff that doesn't add value to the customer, but drives complexity on our side, and then delivering the truck that the customer wants. No, that's very helpful, and I think, you know, to your point, I think one of the, when I look back at a fire truck, right- Mm-hmm. The amount of customization, I'm always blown away by the, just the amount of reds, right? Mm-hmm. The options that you guys have, but just as you think about the preference or the amount of loyalty that the customer has- Mm-hmm for the brand, and you guys, I think, have that that differentiates you versus, you know, the other- Yeah Top competitors, is you have multiple brands. Mm-hmm. Right, so can you talk about maybe the ability to drive some of the simplification or maybe the receptivity from customers- Yeah -to having more standardization in the product, you know, as they've kind of gotten used to, like, they like a brand for a particular reason? Yeah. Well, first of all, it starts with taking out complexity that doesn't drive value to a customer, right? If those of us in the room had 27 options of door handles, we might all pick a different one. If we had five, we might all still just be as happy, and we'd pick one of the five options. So it starts with taking out the complexity that doesn't, that the customer doesn't value, doesn't see. It may be in the internal mechanics that they also don't see. And then I would say it's offering, having offerings that cover the spectrum, so what we would call a semi-custom fire truck, where the options are very limited, but we can get that to you quicker. Mm-hmm. It's pre-designed. It takes us twenty hours. We can go from quote, you know, to final order in a very short timeframe to a full custom fire truck. But even that full custom fire truck, taking out the complexity that's under the hood that nobody sees and taking out the complexity that ultimately doesn't drive value. So it's really having, across that spectrum, what I would call a semi-custom, limited option truck, a large percentage of our portfolio. That will still be custom fire trucks, but more standardized options, more pre-engineered configurations, and then still offering custom fire trucks to those customers, you know, that's what they want and need. Can you talk about maybe the flip side of this? 'Cause, one, obviously, you're doing a lot to, in terms of initiatives, to reduce that cost and the- Yeah You know, standardize things. But on the flip side, you also have, you know, a lot of demand for this product, right? Mm-hmm. So the desire to perhaps increase capacity or to try to get more throughput, can you talk about maybe what investments need to go into that? Or do you feel like you need to make any investments around capacity, throughput, labor? Yeah and maybe, you know, quantify those, if it's possible. Yeah, I mean, investments and additional, what I would call additional throughput, not additional capacity, are somewhat limited. They are there. You know, we, the businesses bring Mark and I ideas for, you know, new laser cutters, new paint booths that all remove, bottlenecks, enable us to maybe reduce outsourcing, initiatives. A key part of throughput is getting the balance and the flow of product correct through the plant, which, given the customization of these fire trucks, it's not always easy to predict how much time is gonna be needed in one cell to the next, because there may be more assembly required. You know, getting production right the first time, built-in quality, make sure you got the right part at the right time, again, the complexity drives some of that. So the real focus is around driving throughput and efficiency that goes with it, much less than, I would say, driving overall capacity. I mean, when we look at the industry, we believe that we're either within or especially with our S180, have leading delivery times. And so, you know, we, we believe that lead times are a competitive advantage and that we'll, you know, we'll continue to stay focused on that. But right now, we believe that we are within those. Now, certainly, we want to drive throughput improvements, efficiency improvements, because we know those units that are on the other towards the end of the backlog, there's a lot of price and margin to harvest from those. So being able to get more trucks out is advantageous, but not to the extent... You know, this is, you know, a GDP plus kind of growth business, and it does have, obviously, some peaks, but, generally speaking, it's a pretty level, a pretty level business. And so we want the right level of capacity for that overall industry demand. Perfect, and you, you talked about lead time, so maybe just kind of an update on how you see the supply chain. Mm-hmm. You know, are there any pockets that you're still kind of working on? Maybe also fold into that, you know, your dual sourcing strategies- Yeah that you started to implement during COVID, the learnings from that, and you know, how much of that have we already kind of seen in the P&L versus how much of that might be incremental, kind of, on top of pricing, on top of everything? Yeah. So I think the supply chain is in much better shape, and I've, you know, never been in a business where, you know, every month we have our strategic op reviews, and every month we're talking about a potential part or component where there's a fire at a plant, there's a strike at a plant, whatever, and you're working through those. I mean, those challenges always exist. But I would say that the supply chain right now is stable. Supply is good. Labor is also good. So, that is really pretty steady right now and not driving the headwinds that it would've been a couple of years ago. But when... And then when we think about the opportunity, therefore, to get some procurement savings, you know, we, we've probably largely been underserved in the opportunity there, and it's still there. We started in the pandemic. I think we had 120 projects to... We were sole sourced to move from sole source, you know, to dual source. And we've worked through 100 of those projects, so we're very far along in that initiative. But we still believe that there's opportunity out there from material cost reduction, you know, to offset inflation. You know, there's gonna be natural inflation that's ahead of us, so. ... That's very helpful. And if there's no questions on the audience on E, I would love to pivot a little bit to the recreational side, right? I think that's been- Mm-hmm. A little bit more of a challenge, you know, some, maybe some COVID overhang there. There was a little bit of a step down this last quarter. Can you just kinda give us the latest of what, how you're kinda seeing that, and, and maybe speak to kind of the near term dynamic, as well as kind of the medium, longer term, how you kinda see that business evolving, and how quickly we can get back to, you know, what was actually pretty attractive margins, in that? Yeah. So when you look at the recreation business, it has been... I mean, it was lower than we anticipated it to be in the third quarter, and we've guided it to be about flat from here on out. I mean, I think we are really proud of the team's ability to deal with the level of market demand out that's out there right now by delivering you know decrementals that are you know better than our 15% target. Margins have stayed above 6%, so you know given the difficult market dynamics, I think the business is performing well and at our expectations. You know, as we look forward, you know, one of the things we've seen over the last year is that dealer inventory is down significantly, down 20% year to date, you know, back to pre-pandemic levels. So we think that the dealer inventory levels have gotten much healthier. You know, look at industry inventory turns for the dealers. You look at our particular inventory turns for the dealers, and they're back to pre-pandemic type of levels. So we feel like the chain has gotten much healthier. And so now it's, you know, it is we need the consumer demand to improve. You know, when does that occur? I'm not gonna predict the date of that. I think that there are some of our business lines are doing well, like our Class A business continues to perform well. But you know, I think as we go forward, anything that would happen to interest rates, these are high-dollar, discretionary funding type of purchases. So if we start to see interest rates come down, I certainly think that would be a driver to see that recreational market start to improve. But I think it's largely gotten through its. The dealers have gotten through their inventory challenges, and from here on out, we just need to see the consumer, I think, get healthier and, you know, more focused on those large purchases. Maybe just from a broader industry perspective, are you seeing, others in the industry also start to feel like they're in a better place and not perhaps do as much discounting or, you know, put pressure on the pricing side? Or is there maybe, you know, from a broader industry perspective or competitive standpoint, maybe a little bit more challenges that others were, you know, you might be in a better place? So when we look across the whole industry, we are performing, I would say, better than the broad industry, and certainly competitors are performing differently across that space. I would say that discounting has been, you know, it's been high. Dealers are very focused on moving old model year 2023 and older model year inventory, and have been discounting to get that inventory moved. So I think that's also a potential tailwind, and at the time that happens, is that discounting should come back to more normalized levels than what we've seen in the recent past. In terms of the model year 2025, what's kind of the latest? I think you talked about it a little bit on the conference call, but just in terms of the willingness or the desire to kind of take on some of the newer product. Yeah. So from our kind of perspective, and as we've had discussions with dealers, you know, they are hesitant to place those model year 2025 orders until they start to see more consumer retail demand. And so they are slow to place those orders. They're taking deliveries typically very late at the end of the month. And so it has not picked up yet. Now, we've talked about the Hershey RV show started yesterday, taking place this week. We've got the manufacturing open house here in a couple of weeks, so that may start to give us some indication if we're starting to see end user demand. And then the next big indication, I think, as we, you know, we're gonna hit the winter months here, would be in the Tampa show early next year. Perfect. Well, we look forward to hearing more about those then. Yeah. Wanted to switch maybe from a portfolio perspective so you've mentioned, you know, at the beginning, the Collins, the ENC. Mm-hmm -shift. Where are we in terms of REV Group's kind of portfolio transformation? Is there more, you know, pruning or, you know, places where either you wanna get out eventually- Yeah ... or potentially do small tuck-ins Yeah ... in terms of, you know, bolstering the portfolio? Yeah. So one, I would say that we're going to bring in our December, when we have our fourth quarter call and add on to that, you know, a virtual type of investor day, pretty focused on forecast, will come with it a refreshed capital allocation philosophy. You know, we regularly review the portfolio. You know, Mark has been clear that he wants businesses that have double-digit margins over time. Can businesses that aren't there do they have plans? They have fix-it plans to get them to double-digit margins, or then what makes sense for them to be in the portfolio? And so those are ongoing discussions that we have. We'll continue to have those, and I think we'll give some more color when we get to the December. Perfect, and I guess maybe. Yeah, so we'll definitely get more color, I guess, in December. Yeah. I'm trying to think about it from the perspective of, you know, the business was perhaps created as a little bit more of a roll-up strategy- Mm-hmm ... and a number of kind of, you know, pieces together. As we think about areas that you might be interested in, you mentioned some of the metrics that maybe you're focused on. From areas of business, is there the potential to look into, or the willingness to look into, you know, adjacencies or areas that maybe, you know, there's some kind of cross, you know- Yeah. Maybe not necessarily cross-selling, but perhaps some, you know, ability to implement things across, from across- Yeah -or operational? Yeah. How are you thinking about this opportunity? Yeah, I would say, you know, I think as we should do, always discussing as we look at ideas, we look at opportunities, I would say everything is on the table. Everything may not be a great idea, but, you know, different ideas are certainly talked about and debated. But I'm gonna hold off kind of guiding there until we get to that December meeting. Got it. And maybe now to go back to, I guess, the specialty business. Mm-hmm. You know, so you mentioned terminal, you mentioned a couple of the other assets that you have there. So, so the terminal trucks have been under a little bit of pressure. Mm-hmm. But it sounds like that's stabilizing somewhat. Yep. So I wanted to touch, you know, on that. Like, I guess, how do you see that asset, you know, kind of continuing to perform from here? and then also kind of the core nature of that over time. Yeah. So the terminal is a very small piece of the total portfolio. It saw very strong demand, highly correlated to the build-out of distribution warehouses with the supply chain and post-pandemic port activity. So it really highly correlated to distribution warehouse construction and port activity. Dealers inventory, not unlike recreation, got a little heavy when demand pulled back, and so we've spent the last, you know, really most of this year, kind of as dealers have gotten their inventory levels more healthy, which we've seen that. So we think we're here at the bottom of that. We've seen some more quoting activity, more interest in the recent past. We would expect it to recover back to more normal levels, you know, I'd say next year, but still, it's gonna be a very small piece of our total portfolio. Deliver kind of mid-single-digit margins currently. It's got a nice parts business. The street sweeper business has got a nice little parts business that goes with it. Got it. Is that mid-single digits kind of the way you see that longer term, or do you kind of... Is that more reflective of kind of the unwind that we've seen? Well, that mid-single digits is what it's performed in the past. I mean, it certainly falls into that category that I talked about, which is, does it have a plan to get itself to double-digit margins and, efficiency improvements, material cost reductions, you know, or what makes sense? But it's a part of that constantly reviewing the portfolio, driving businesses to get to those double-digit margins, and- Perfect. I want to check in and see if anybody in the audience has any questions. If not, you know, just wanted to touch base, maybe more from a, again, I know you're gonna touch base on some of this in December, but in terms of dividend strategy and shareholder returns- Mm-hmm. We, you know, we like to ask, I guess, how is kind of, at least the current thinking- Yeah ... on that? Yeah. I mean, if you look at cash returned to shareholders since twenty twenty, which is when Mark joined the business, REV Group is- has returned, you know, $424 million of cash back to shareholders, about half through regular and special dividends, about half through share buybacks. So we've been, I think, a very, you know, strong contributor of delivering cash back to shareholders. Debt was also $400 million, kind of in twenty twenty. You know, we'll exit the year with it at less than one time, so we've also really improved our liquidity and leverage ratio. And so, you know, I think as we go forward, I'm not going to get ahead of and, and- Mm-hmm ... and pre-guide what we're gonna say there. But, you know, I think we have a history of being kind of all of the above type of, you know, capital allocation strategy. Yeah. No, that makes sense. I tried. Maybe just to kind of close out, you know, one final question, just, we get, particularly on the commercial vehicle side, a lot of questions around electrification, how that's playing into, you know, areas that perhaps might get penetrated sooner. How do you think about that within your business in terms of both investments that you might be making, as well as, you know, the ability of electrification to penetrate, you know, both RVs and Specialty Vehicles- Yeah ... to a greater degree? Yeah, I would say if you look at kind of our four products, we've got fire apparatus, ambulance, terminal trucks, and recreation. There's really been no end market interest in electrification for recreation vehicles. I would say essentially not as well in the ambulance space. So where there's been some interest in electrification from the end consumer has been in fire trucks and in terminal trucks. If you think about a terminal truck, it stays within a pretty tight zone. It's not on the road. You know, the customer can build the infrastructure that it needs. So we have programs in place around electrification for terminal trucks, and then we have an all-electric fire truck as well. Demand has been, you know, there are large cities where there's interest in that. That product offering is out there. But I, again, you go back to, you know, 40% of fire departments are in rural communities with less than 5,000 people. I think large fire departments, in some cases, the infrastructure and an old, if you think about an old firehouse, to build the infrastructure they would need- Right ... I think this is gonna be a very slow transition. Yeah ... if at all, to any kind of large demand for electric-electrification, and fire trucks. But there is some, and- Yeah ... and we participate in that, but it's pretty small in terms of total numbers. Perfect. That brings us to the end of time. Again, Amy, thank you, appreciate the time. Yeah. Thank you. Yeah, thank you.