Good to get us starting. Okay. Thanks, everyone. We're moving along here. This afternoon we have a full slate. Now, next several slots, we have machinery companies presenting. Starting off with the team from Oshkosh, which is great. They've been very good, strong, and loyal supporters over the years, so thank you guys for attending again. To my left, John Pfeifer is the President and CEO. He's been with Oshkosh for just a little over four years now.
Just under four.
Just under, okay. Well, yeah, who's counting? Then Patrick Davidson, the IR extraordinaire to his left, who many of you guys probably know. I think before we get into the Q&A, and maybe we'll just turn it over to John to give some opening remarks, and then we'll go through. I've got some questions, and then hopefully the audience can interject. With that, John, why don't you take it?
Great. Thanks, Tim. Pat and I are both delighted to be here and participating in the conference as we are every year. Let me just give you an overview of our company and what's happening with our company before we go into the Q&A. You know, ostensibly, as you may know, we produce, design, develop, produce, and supply specialty vehicles and equipment. That's what we do, but the why we do it, to us, is much more important and much more powerful and tells you how we direct our investments and our capital. We see ourselves as in business to serve people in our communities here and around the world who do really tough work. Not only is it tough work, but it's critical work.
Without that work, our communities don't operate. We focus on those people that are doing that critical work and those tough jobs. It's firefighters, it's soldiers, it's people that work in environmental services and construction. They're doing tough jobs, and we have to deliver them productivity, and we have to deliver them safety every single day. And we take that purpose really seriously, and it directs our CapEx, and it directs our capital plans and how we dedicate our engineering and innovation capability to making improvements there. We look at ourselves. Here we are in early 2023. For us as an industrial company, it's been a bit of a tumultuous couple of years, as probably most industrials would say. We're sitting here today.
We've got a $14.1 billion backlog, largest backlog in the history of our company. That's up from about $9.3 billion a year ago. I think it's interesting to look at that backlog and with continuing high order rates. As we went through, as I said, the last couple of years have been a little bit difficult. We've had to adjust to supply chain disruption, and we've had to adjust to persistent inflation, to the likes, as we all know, that we haven't seen in many decades. We went through a turbulent period adjusting to that. We started a year ago in the first half and delivered about $0.76 of EPS in the first half of 2022. In the second half, we delivered $2.72.
$0.76 to $2.72 shows you that we're on a good trajectory in adjusting to inflation, as well as continuing to make improvements in how we execute our supply chain and the capability of our supply chain. As we're sitting here with that $14.1 billion backlog and strong order rates essentially across our enterprise, we feel great about that backlog and where it is today and what's in that backlog and what we're gonna be able to do going forward. If we look across our company, today we're organized in three primary divisions or segments that we report, and each has several businesses addressing different end markets. We're in access equipment, that's primarily headlined by JLG. The access equipment business is strong.
You see a lot of continuing investment by our customer base, and we see lots of investments in mega projects. These are $400 million+ unique projects on infrastructure spending, chip manufacturing. We've heard the list recently. That mega project work, much of it's spawned by big bills that were passed in Congress, is only in its early stages. It'll take years and years to execute what they've passed into law. That's pulling in a lot of our fleet that our customers are supplying to support those mega projects. That's an underlying boost to demand for several years going forward, along with the fact that there is aged fleet in access equipment. We're continuing to drive, of course, innovations in full electrification, removing even hydraulics and putting electric actuation into equipment.
We're putting in more intelligent product capabilities into the segment. That technology also helps drive demand. We see a healthy demand picture for the foreseeable future in our access equipment, specifically within JLG's business. Next, we go to our vocational business. We combine two different segments into a vocational segment, which is purpose-built vehicles to serve a unique purpose, like firefighting, airport rescue, wildland fires, refuse and recycling collection. Those are the types of locations that we serve. We've been making an enormous amount of investment. We see strong demand in our end markets. In fire, for example, we again have the largest backlog we've ever had with really healthy order rates.
We're investing in technology like electrification, which is gonna be an underpin of demand for many years to come, as over time, municipalities across the continent will upgrade to electric fleets. That's a positive development. We've just yesterday introduced the first-ever fully integrated, fully electric refuse and recycling collection vehicle. Immediately, one of our biggest customers, Republic, adopted it as the vehicle of the future. It's another technological innovation that will continue to support our healthy growth as we look forward through the years. The defense business is our third segment. The defense business has our postal contract in it will go into production next year. 75% of these vehicles, largest delivery fleet in the world, will be electric. We're really excited about it. The Postal Service is excited about it.
We also do traditional defense product, and I'll talk about the perhaps you know about it, the 800-pound gorilla in the room. One of our core products is tactical wheeled vehicles. It was announced a week ago that we did not win the follow-on contract to the JLTV. I will tell you, I was surprised by it. Of course, it was disappointing, but I will also tell you that when we saw the price that the contract was awarded at, we were not interested in supplying that vehicle at that level of price. We're a business that thrives on innovation. We thrive on quality supply, and we are not interested in being a low-margin commodity-type supplier. We'll take that information.
We'll invest our resources accordingly, particularly in the Defense segment, much more towards combat programs that we have been winning, such as the Stryker contract, and we'll continue to grow in profitable categories, understanding that tactical wheeled vehicles will likely be under pressure, for quite some time. I just wanted to be forward with that. Nevertheless, even without that follow-on contract, our Defense business with the postal contract still has a very good outlook going forward, just muted by the fact that in 2025, we'll see the JLTV drop-off. We're very excited about what we see ahead, and where we're positioned as we've gotten through the past couple of years. With that, Tim.
That's great. Great overview.
Do you?
Maybe we'll start in along the lines of how you walked through it. Maybe start first with Access. You know, one of your larger customers reported today and, you know, continuation of what we've seen in terms of the just, you know, very solid messaging in terms of how their business is performing.
Mm-hmm.
You know, clearly demand is there. Your outlook for this year of revenues of 6%.
Yeah.
I mean, based on what you just described, with some pricing in there, that, you know.
Yeah.
It would seem as though there's probably more volume demand, but I guess it's a function of just how the supply chains perform.
It's exactly right. If you look at our access equipment business, we have a record backlog at $4.4 billion. That is more than double what it typically would be at our current level of revenue. Our order rates are really, really strong in this business and continuing to be strong. We have great relationships with our customers. That's everyone from the big, big national customers that we have to small independent customers. When we put together our guidance for 2023, which is $5.50 of EPS, you know, JLG and our access business makes up a significant portion of that guidance. As you said, you only see growth in what we guided by about, excuse me, by about 6%.
Really, on a unit level basis, you know, very minimal growth. That is purely so we can say, "Well, how can that be? You've got the biggest backlog you've ever had in the history of the company with strong order rates." It's purely because we're taking a very conservative view on supply chain improvement. We've been through a tumultuous time with supply chain. We didn't wanna be overly aggressive with the assumptions that we put into how supply chain will perform throughout 2023. We were conservative with a very moderate improvement in supply chain as we go through the year. That's really the fundamental reason for that 6% growth.
potentially be in a position where you know, you can maybe underpromise and overdeliver.
We hope that that's the case always, yeah.
Yeah. Got it. Just from a profitability standpoint, just like you laid out the company as a whole, you know, end of the year in access with think is fourth quarter margins as high as they've been.
Yeah.
You normally take a seasonal step back in the first quarter, and then it's the plan, just as you're delivering on those backlogs, presumably of greater visibility from a margin standpoint as to what's in that backlog? Is that a fair-
The backlog is very, very healthy in terms of, you know, we've had to work through persistent inflation in our access equipment segment. We've had to keep pace with the input cost increases that we've seen, which have been, as we all know, have been more than anyone anticipated a year or two ago. We've been able to do that, and we've been able to work through the price-protected backlog and get to the point where we want to be with regard to how we're priced. We think very fairly. We're just trying to keep our head above the water with regard to where inflation is.
As we go forward, we'll be paying very close attention to our ability to execute, and our ability to deliver product as fast as we can to our customers. We've got the capacity. We just need to continue to execute from a supply chain perspective.
Got it. Got it. You mentioned earlier on the fleet age. I mean, the dynamic of from a... There was a chart you showed at your Analyst Day of roughly for aerials, I think it was, is combined like 60 months.
60 months, yeah.
They're typically-
Yeah.
You know, that those. They can certainly run higher for some point.
Yeah.
I would imagine that from feedback you get from the customer base is at some point we.
Yeah.
Get back closer to 45, 50 months.
Yeah. Our customers wanna bring the average fleet age down. They wanna do that, and they're trying to do that. Of course, we would like to see that happen as well. What I think is happening is that our customers are trying to grow their fleet 'cause there's a lot of demand on fleet for new mega projects, at the same time that they're trying to replace fleet. There has not been enough capacity in our industry to support both of those things happening simultaneously. What's happened is we continue with a relatively aged fleet of equipment. The good news is that used prices are holding up, so as we stretch the average age of equipment, the residual values are not dropping off at, say, seven or eight years.
They're holding up a little bit beyond that, which I think is good for the industry because it supports utilization of the equipment and supports extending life a little bit. Ultimately, that equipment's gonna need to start to get replaced.
Yeah. In this prolonged period in which supply has been constrained, have you, whether purposefully or unintentionally, have you seen a shift in terms of your customer mix? Meaning are you maybe as, you know, a different subset or the IRC is getting a little higher percent or ?
I would say that we try to be very careful about allocation and not being put in a position where we're starving any customer. I would tell you that there's a little bit higher weight that goes to the NRCs today than IRCs, but we are serving both segments. I wouldn't call it a material amount higher to the NRCs, but when you think about it, I believe that the NRCs are supplying more of the mega projects than the IRCs are, so they're demanding a little bit more fleet to enable themselves to be able to do that.
Your mix, the composition of your own mix, that it's always been weighted a little bit.
It's relatively consistent, but a little bit more weighted to NRCs, a little bit more weighted than historical terms.
Got it. Yeah. Okay.
Not a material amount.
Yeah. Yeah. Speaking of that, the ARA maybe it isn't what it used to be, but I was down there a week or two ago, not seeing JLG there was interesting. Maybe it's a function you just don't need to sell.
Well, I would say, you know, we're trying to do things differently, and we're trying to do things where we can really maximize the impact that we can have from a customer and marketing perspective. What we're really doing is we're trying to create focused events with our customers to really give our customers an understanding of new technology that's coming on board, really provide a setting where they can experience it more than they might be able to experience it at an ARA Show.
Mm.
That's why you see some of the shift is we're trying new things that are a little bit more engaging with our customers, where they can test out autonomous features, for example.
Mm.
You might not have the opportunity to do that at a traditional show.
Yeah.
That's a little bit about where our focus has been going. That's why you didn't see us at the ARA this year.
Got it.
Yeah.
Can you talk I mean, a lot of this discussion on North America, which is the biggest piece.
Yeah.
Of access, but maybe hit on the other important markets. You know, Europe.
Yeah.
It seems like, I mean, if I go back maybe a decade ago, the currency was at a different place.
Billion dollar market, yeah.
Business. I mean, we've seen such adoption growth of access in North America. I mean, is it being displaced by other products, or is there a competitive-
Well, I think it's a combination of things, but it's the sum of it is competitive dynamics for sure, in terms of what's happening in the European market. The European market in general today, I will tell you, is more healthy than you might think it would be when we hear everything that we hear going on in Europe with energy prices skyrocketing and so forth. The European market in general has held up okay. It is a very competitive market. We've got a great team of people there, and we try to serve that market in different ways to keep ourselves competitive as the market continues to evolve.
Mm-hmm.
I'd say Europe in total is healthy today. Other regions of the world, South America, Latin America, very healthy market. Asia has been suffering primarily because of China. We all know what's been happening in China with COVID policies and so forth. That's really been a drag on the market there recently. China's the biggest market by far in Asia. In fact, it's one of the top two markets in the world for access equipment. When China comes down, it really impacts the entire Asian continent.
Mm-hmm.
In China, we have a fantastic manufacturing capability. What you've seen us do is take more of that capacity and supply other parts of the world. We've always supplied Southeast Asia from there. We supply Australia and New Zealand from there. We even go to Europe from China.
Mm.
Because of our advantage in doing that. We've even taken China and had it supply as far away as South and Central America because of capacity to free up more of our capacity in North America going to North America.
All right. Got it. Okay. Maybe let's shift to defense, being that the, obviously, the, the loss of the JLTV recompete hurts. Is there a way I mean, I think with the initial impact... Is the financial impact start to be seen maybe in 2025?
Yeah.
sooner than that?
Yeah. You know, small impact in 2024. It's primarily a material impact starts from 2025. The way to think about it is that it depends on presidential budget cycles. This JLTV tends to be $800 million-$1 billion of revenue on an annual basis. Think about it as, you know, mid to high single-digit operating margins. I mean, that's the way to think about the impact of the program. I wanna be clear again. I commented on it in my opening remarks. You know, we've designed and developed this vehicle. It's our design, it's our development. Absolutely, we're disappointed that we're going to lose it from 2025. I wanna be clear, we're not a commodity supplier.
It's not what our business model is based on. When you look at a commodity type pricing, which it was won at for the follow-on contract, that's not what we would be willing to do. We're just not. We're better off to put our capital to work where we're gonna drive strong returns, put our engineering power behind programs with strong returns than accept commodity pricing on a program like this. It hurts in the short term. We will absolutely get over this. We'll put our capital where it belongs. We're gonna continue to grow with or without JLTV. We'll see nice, strong growth through 2025, 2026, 2027 in our company. We'll make adjustments. We'll continue to invest in combat programs. That's where a lot of DOD priorities are going. We've been winning some programs in combat already.
I think that that's the future that we have to look to when we think about our defense business saying, "Okay, tactical wheeled vehicles are under a lot of pressure from a budgetary perspective, and where we need to be focused is what we can do in the combat market.
Yeah.
That's what we're gonna have to do...
Got it.
More aggressively.
Yeah. Well, as you go after some of these like adjacencies, if you, as you call them, do you from a tactical wheel perspective, one of the advantages I thought in the past was you can leverage a lot of your common architecture, you know, transmissions that may go in.
Yeah.
Axis. It gives you some scale advantage.
That's right.
As you get into these other adjacencies, are you still able to leverage those? Basically, do you have the same kind of, you know, cost?
I think the thing that we leverage the most across the company, you know, more than saying, "Okay, we can leverage this power, this powertrain across multiple different platforms in different parts of our business," more of the leverage that we get is from a technological standpoint.
Mm.
From an autonomous feature standpoint, from an electrification feature standpoint. You know, one of the reasons that you've seen us de-develop and introduce electrified products in anything from an 80,000 pound airport rescue and firefighting vehicle to a postal delivery vehicle, to an eJLTV, is because we're able to take our understanding and 20 years of know-how in electrification and apply it to different areas of our business, 'cause there's commonality in that regard. We do the same thing with autonomy. We de-develop autonomous features in different parts of the business, and we apply it across the board. I think that's where we get the most leverage.
Got it.
We'll be careful that we continue to get that leverage, going forward, with or without JLTV.
Okay. For USPS now steps in as the kind of anchor program for you.
Yeah.
You know, there's, obviously, and maybe it continues a lot of volatility in terms of battery costs. As you think about, you know, the inflation that you've experienced for some of these fixed price programs.
Yeah.
you know, makes it tougher. How do you, or can you kind of protect or hedge yourself to the extent that becomes a more meaningful cost input?
We can and we have.
Okay.
I'll say that.
Okay. Got it.
You know, giving lithium-ion batteries is one example. We've all seen over the past 10 years, lithium-ion battery costs come way, way down.
Mm.
That's one of the reasons we've seen a proliferation of electrification, 'cause costs have gotten to a point where you can make an economic benefit, especially in a commercial operation, by applying electrification, because costs have come in line. Now it's not just a sustainability benefit, there's also an economic benefit. High demand on lithium-ion is causing pricing to go back up a bit. We don't know where that's going to go, so we have economic price adjustment in our contracts that allows us to make adjustments for the change in specific supply materials and components like lithium-ion, like aluminum. That's new on big programs going forward. It's protection we have not had on legacy programs.
we think that's really gonna be a benefit for for the future sustainability of our business and not going through tough times.
Yeah.
with if we see a period of inflation again.
Interesting. We'll see if there's any questions from the audience. If not, we can move on. Got one over here. Go ahead. I'll just repeat it then.
Mm.
For R&D and CapEx towards tactical wheeled vehicles that, you know, you talked about now, it sounds like some of that can get essentially diverted towards probably combat programs. I'm curious if there are certain dollar amounts in your mind, and then where you think those dollars can be redeployed in, into specific combat offerings.
It's a great question. I cannot give you specific dollar amounts yet because it's too early. Right now, we're doing work on, you know, we've got incredible engineering talent in our company. It's one of our great strengths. We're looking at the programs that we have that are driving growth, we're looking at where do we position our engineering talent to work on programs where there's really strong returns. That may be combat, but it can be in other segments as well, because our engineering capability doesn't just apply to defense, it applies to a lot of other programs we do outside of defense. And capitals will also be redeployed more to priorities of the DoD that they're telling us are the most important, which again, are adjacencies like combat vehicles.
You'll see capital get directed away from, tactical wheeled vehicles as well. I can't give you any dollar numbers at this point.
Good. Maybe we'll shift to vocational. You know, the fire and emergency has been on this good, you know, over the last, what? Half a decade.
Yeah.
A nice trajectory. Obviously, supply chain has disrupted that. We talk about the two pieces within it. Maybe just as a starting point, I was interested to see the comment in the release about, you know, it's a combined when you, when you take out the sale, the mixers, it's a $2 billion-ish business.
Right.
talking about, you know, getting it to $3 billion or so.
Yeah.
in coming years. you know, what's driving that? You obviously wouldn't have put it out there if you didn't think there was-
Lot. By the way, that $2 billion-$3 billion is in the foreseeable future. It's on the horizon. It's organic. It will happen organically. We have opportunities for inorganic development as well, which can push it beyond that $3 billion. What's underpinning it? First of all, we've got a huge backlog in our fire and emergency business, and we continue to gain market share. The backlog is driven by really healthy municipal budgets. It's driven by an aged fleet of fire trucks in the marketplace, and it's driven by technology. We introduced the Volterra electric municipal fire truck. This is a 40,000 pound vehicle. We have vehicles running today on live calls every day of the week. It's a fantastic vehicle.
It drives a lot of benefit for municipal municipalities across the country. We have not fully released this for sale yet, but we will shortly. That one program will drive really nice long-term demand as people or municipalities, I should say, continue over the years to upgrade their fleets, they'll upgrade to electrification, because that satisfies a lot of emissions regulations in parts of the countries. Of course, California's is one that everyone thinks of. We'll see a high adoption rate, I believe, in the state of California.
Mm.
There is widespread interest in this technology that we've developed for electrified municipal fire trucks across the country. I think that'll be a long-term demand driver.
Mm.
In the refuse and recycling collection space, yesterday, we made public, did a press release, that we've got the first ever fully integrated electric refuse and recycling collection vehicle. Republic Services immediately came out and said, "We're adopting this." I'm paraphrasing. It's the vehicle of the future for them. Waste WM made a comment about it as well. This is going to completely change the landscape in recycling and refuse collection because not only is it fully zero emission and electric, but it's the first ever fully integrated product. When I say that, I mean every product that came before it was a third-party chassis with a body built on top of it. There's not much integration, if any, between the operation inside the cab and what's happening on the vocational section behind it. Now it's fully integrated.
We design and develop the entire thing, so the operator in the cab can be much more productive as they work and also a lot more safe as they work. Autonomous features are built into it. This is gonna be a real driver for growth in that business as well.
Interesting. We talk about the U.S. fire apparatus market in unit terms. It's been, you know, pre-housing crisis, I think it was like north of 5,000.
Right. 5,500.
5,500 Yeah. Where are we today? You know, I think you've expanded your capacity there, so presumably.
Yeah, we're expanding. Yeah.
Yeah.
It was 5,500 prior to the Great Recession. Great Recession impacted the business greatly because the Great Recession was a real estate crisis, as we all know. Real estate taxes are primarily what fund the municipal budget. Municipal budgets were under a lot of pressure coming out of the Great Recession, and there was a big drop off in demand for municipal fire trucks. It went down to as low as 3,500 units a year. It's kind of built back into the mid 4,000s for a period of time, and now it's back beyond the 5,500 prior peak unit and growing from there. The demand that we see from municipalities indicates to us it will continue to grow as fleets are upgraded and new technology is adopted.
Pierce's share is growing over that.
Pierce's share continues to grow. Yeah.
On the discussion on the new refuse vehicle, there are some. I mean, LNG has been pretty big part of that market.
CNG.
CNG, yeah. I mean, there are some credits that the operators earn, right, by producing and selling their own natural gas.
Correct.
I'm just curious what %, not what %, but how big, how prevalent can these electric units get when you have that dynamic?
Yeah. I think, you know, different customers have different levels of, or different technologies in their fleets. WM is a big, LNG fleet.
Mm-hmm.
What I think you'll see is there's a lot of diesel applications out there in the recycling and waste collection industry. I think what you'll see is the diesel units will get replaced first, and probably the last units that get replaced with electrification would be the CNG units. That's my expectation.
Yeah.
That certainly would stand to make common sense as well.
Yeah. On the commercial side, the chassis availability has been a constraint for some time.
Yeah. Yeah.
We are hearing just pockets of easing on that front. Have you guys seen any?
Yeah. Yeah.
You have.
It's still a constraint, but we're seeing it get better, gradually with each quarter that goes by.
Got it. Got it. Okay. I'm trying to think. I had another comment here on vocational, but I blanked. Maybe we'll go to, going back to your earlier comments, I'm just curious, you know, you still very much a North American-centric business in large part due to defense. These markets outside North America, Europe and Asia specifically, I mean, some of the macro winds are shifting a little bit, it seems. Are you guys, or have you seen any notable change over the last, you know, several months in terms of the outlook for your markets in both in Western Europe and Asia?
In terms of deteriorating conditions or?
I mean, there's some optimism around China, as we come out of the new year. I mean, and that, again, not a huge market for you, but.
Yeah. Well, China's a is a decent market for us. We got a lot of really great people there, and we got great production capability there.
Mm-hmm.
I think it's a little bit too early to tell how China's going to evolve coming out of their recent reopening of the economy, so to speak.
Yeah.
It's still a market that's under a lot of stress for us right now in China. We have some hope that it will get better sooner, but that's not what we're planning for.
Sure.
You know, we kinda need to see the data points of it getting better.
Yeah.
I think we're in a really good position in China, though, because we've got fantastic production capability, and we need the capacity, so we can utilize that capacity and leverage it to support growth in other regions of the world, which is what we've been doing.
Yeah.
That's been an advantage for us.
Yeah. Presumably that excess capacity, as do your Chinese competitors, right?
Yeah.
You're probably seeing that-
We're seeing-
-that supply get imported into other parts of the-
Particularly Europe. You know, where you see capacity from our competition in China going the most is probably the European continent.
Yeah. Got it. Okay. just shifting maybe to capital allocation. one of the things that stood out to me anyway from the Investor Day was just the notable shift towards, you know, being M&A.
Yeah.
Bigger and bigger part of the story.
Yeah.
you know, obviously, the interest rate environment has changed quite a bit. I presume that that's not altering those plans.
That is not altering.
Is it maybe shifting any of the discussions with potential targets in terms of, you know, i.e. or more properties becoming?
I think that I think in general, it changes the landscape a little bit in terms of when you want to make an acquisition, in terms of who you're competing with because of the interest rate environment.
Mm-hmm.
It does not really impact our ability to go out and execute M&A. You know, we generate healthy levels of cash, and we have a strong balance sheet. That's an advantage for us.
Mm-hmm.
Ultimately, what we do is we look at our businesses and we say, where, you know, where are there adjacencies. Where we can apply our technological capability and our purpose-built mindset and where we can come in and offer a better solution in that end market than what is being offered today.
Mm.
If you look at a great analog, I usually use the Postal Service as a great analog. We saw a market where we could come in and provide a purpose-built product with technological advantages versus what's being offered in the market anywhere in delivery today. That's how we came in and won the program. When I talk about purpose-built, what I mean is we study the people working in the industry. In this case, a postal carrier.
Mm-hmm.
We study the postal carrier and what they have to do every day, every single stop that they get to, and how is it that we can make them or help them be more productive, easier to operate, easier to do their job, and safer. When we do that, we come to solutions that allow our customers, in this case, the Postal Service, to be more productive and more cost-effective. It brings their total cost of ownership down.
Mm.
When we look at M&A in different parts of what we do, really that's the type of thing that we look at. Where can we acquire, where we can make a big one plus one equals a lot more than three equation.
Got it. If you have the hurdle rates changed as a function of the cost of capital? I mean.
Yeah, if you looked at our weighted average cost of capital-
Yeah.
It's certainly gone up a bit.
Yeah.
Yeah. They're easily attainable hurdle rates.
Yeah. Got it. maybe one on CapEx. I mean, you've got the South Carolina plant build out-
Yeah.
consuming a lot of capital. As we look beyond 2023, does that go back to kind of a low single digit as a % of revenue or is this structurally?
You know, you'll see us spend a little bit more than normal CapEx in 2023 because of completing the postal plant in Spartanburg, South Carolina, building out the plant in Murfreesboro, Tennessee, that's going to do the electric refuse collection as well as some fire cabs for us.
Mm-hmm.
You'll see some expansion of capacity at JLG as well, that capacity is needed to support the long-term growth that we see on the horizon.
Mm.
you see a little bit more of the normal CapEx in 2023, and then you'll see it kind of come back to a little more normal in 2024, 2025.
Got it. 15 seconds if you.
Right.
Yeah.
Yeah.
We'll wrap it up there.
Thank you very much, John.
Thank you.
Delighted to be here.
Thank you, Pat.
Yeah.