REV Group, Inc. (NYSE:REVG) Q2 2023 Earnings Call Transcript

John Joyner: Okay. Thank you. And then in the – your release and prepared remarks like most other industrial companies, you talked about supply chain getting better along with some kind of greater labor efficiencies. But have any supply-related issues lately cropped off in the past few weeks? I mean — and I asked this question because we’ve heard that some on-highway markets may have experienced recent issues. I mean I want to say a few weeks, I’m talking about intern areas.

Mark Skonieczny: Yes, we do have also we are not immune to those being in the category and industrial side. So we deal with those on a day-to-day basis. I can say that the — our supply chain team has done very well. Remember, we are in a unique situation where we said that we have been under performing from a purchasing perspective, and we’ve done a lot of work from a dual sourcing perspective that would come to fruition here in the first calendar quarter, ’23, and those are now – we’re well ahead where we thought we would be from a dual sourcing or alternative sourcing space. So we are seeing some momentum just from improving our internal health here and expanding our supply base. But also, as I said in my closing remarks, we are not — we are not waiving the checker flag here.

We know that there’s things that pop up from a day to day, and we need to be nimble and be managed through those with our partners. So that’s what I would say there. So there’s always these one-offs that we have to deal with on a day-to-day basis.

John Joyner: Okay. Got it. And then maybe one more if I could. When you think about these kind of alternative fuel technologies such as hydrogen fuel cells, among others, — when do you think these — I mean, maybe when do you think these will receive kind of critical mass? I mean — and what has the feedback been the reliability how has that been and kind of the capability on, say, real-world usage versus a test environment on these products?

Mark Skonieczny: Yes. Again, we’re still — we’re starting to kick those off. So I would say, real world. We obviously — there’s people in the space right now that have vehicles out there that are touting the capabilities of these units. First units at our ENC facility I quoted are just starting to be going down to production, but we have had, obviously, demo units that have been working several hundred thousands of miles. So we feel very comfortable in our solutions. And we’re in the – like I said in my closed remarks, it’s really going to be customer choice on do they go to a full battery electric or fuel cell. And we’re just giving we have the capability to provide both. So right now, we’re trying to be flexible. So we meet our customer needs.

But I would say we still are seeing the early days of what the full take rate is going to be on a go-forward basis, but we are seeing higher bidding activity like we talked about. So the ability to have funding to pay for this primally has also helped us.

John Joyner: Okay. Excellent. Thank you so much for the time.

Mark Skonieczny: Thank you.

Operator: [Operator Instructions] Our next question comes from the line of Mike Shlisky with D.A. Davidson. Please proceed with your question.