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

Mike Shlisky: Good morning and thanks for thank for taking the questions. A little granular, but I wanted to ask about capacity and some of the products there going electric. In certain states, like California, we’re going to start to see – it sounds like you actually can’t order a truck at nonelectric in the capacities segments. So I’m curious if you could just tell us a little bit about whether you prepared for a ramp-up in your facility to make more AVs starting in 2024?

Mark Skonieczny: Yes. Sure. For sure, Mike. And an I was just out there last month through and I both were out there last month. And at capacity, we do have a dedicated facility there that is doing the development of both hydrogen fuel cell and electric. So we are conscious of that. We do have the hyper [ph] product that is starting to go into use case, maybe carrying out to John’s earlier point, we did have a beta test or what you would say, use case development within some major customers. So we feel very comfortable there and our ability to ramp there and the team, what they’ve done on the IC side, we’re very confident that if it was to convert to all electric that we see the same sort of momentum there. So we have a very seasoned team and a team that’s very capable with the throughput we’ve seen on the IC side that would carry over to the EV and hydrogen fuel cell side. So we feel very comfortable from that perspective.

Mike Shlisky: I’m curious, just a follow-up there, Mark, on it a somewhat fragmented market. I’m curious whether you could tell us whether there’s some players in the market are not going to have hydrogen or battery options going forward? And is there a reasonable market share gain opportunity, call it, 2024 or 2025 for that brand?

Mark Skonieczny: For sure. Yes. I think you’ll see some substitutions at that point. Obviously, I think it will all carry on with – we will probably participate to be able to pick up market share. But at the same time, when you look at our ability to produce those EVs, I think it will be there and it will just be a matter of what the overall industry is from a take rate given the port activity and whatnot that these – in this product or the industry they serve.

Mike Shlisky: Got it. Got it. And then just switching over to FNE real quick. It sounds like obviously agents having higher content helped during the quarter content per vehicle. But then it sounds like on the fire side, content was not in – could you give us just a little bit of thoughts on – like the rest of this year and the first part of next fiscal year, whether content is going to be a tailwind for you? Or as your new COO, kind of gets a better hold of the business, whether you’ll be taking content out, trying to get more product out the door? What’s the content outlook, I guess, and how that might have tenethealt12 months or so?

Mark Skonieczny: Yes, maybe not touching on 24 right now, but when we look at the content, when we talk about content there, on the fire side, we’re talking about higher complex aerial units versus, say, commercial pumpers. And so the our differential is significant there. So our ability to deliver more units. And again, we’re looking at a mix equation here. So what we’re talking about fire is more around these commercial units versus a custom pumper or an aerial unit. So that’s why we talk about low content for fire content. So if you look at Q2, we had more commercial type units going through. And then the ambulance side, it’s really more of a reflection of the chassis mix we have now and our ability to produce more modular units, which we call them versus bands, which are built like on a transit band unit.