REV Group, Inc. (NYSE:REVG) Q1 2023 Earnings Call Transcript

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Operator: Our next question is from the line of Mike Shlisky with D.A. Davidson.

David Johnson: This is David Johnson on for Mike. You mentioned strong orders of school buses and terminal trucks in commercial but there wasn’t much commentary on sweepers. I was wondering if you can comment on what you’re seeing in that product line?

Mark Skonieczny: Yes, the sweepers, they’re in line with, I guess, they call a normalized run rate so it’s nothing intentional of leaving them out. I think the intent is that to say the specialty businesses which include both the terminal trucks and the street sweepers.

David Johnson: Got it. And maybe the last question, I want to turn back to recreation. With interest rates being what they are, do you get the sense that recreation dealers are unwilling to restock even when the inventory levels are low? Do you need to see lower rates before they really stock up?

Mark Skonieczny: I think — a lot of — I’ve had these questions previously. The dealers are going to put on the lot what sells. And we’ve been very — what we’ve talked about before is when you look at some of the products we have, if your units are being accepted by the market, they’re going to put on units that actually turn and we look at some of our products, they have quicker turn rates than what we’re seeing in the competition. So that’s some of the things that we’re selling the dealers on. So and they see it. So they’re asking for products like it talks about our Class C business is still on allocation with some of our dealers so they are asking for more of that product because it is turning. And our inventory levels still are lower than pre-COVID. So we still have not given a normalized inventory level yet. So there will be an inflection point at some point here but we haven’t reached it yet.

Operator: There are no further questions at this time. I would like to turn the floor back over to Mark Skonieczny for closing comments.

Mark Skonieczny: Yes, thank you, operator. So once again, I’d like to thank everyone on the call for joining us this morning. I’d also like to thank our employees for their hard work in this quarter. So far, I am pleased with the momentum demonstrated at many of the businesses as we exited the first quarter and I look forward to resuming my site visits over the next several weeks. As I said in the past, I believe there’s a great – deal of value to be created around by improving the processes we control within the 4 walls or operations. And the pricing and multi-sourcing actions enacted over the past 1.5 years, position us for even greater opportunities. So, we will continue to focus on specific needs and solutions of individual businesses to accelerate the starts and completions in order to reduce our backlogs. So, I look forward to updating you on our progress when we report second quarter results in June. Thank you, again.

Operator: This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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