Oshkosh (OSK) Q1 2026 Earnings Transcript

Image source: The Motley Fool.

DATE

May 8, 2026, 9:30 a.m. ET

CALL PARTICIPANTS

• President & Chief Executive Officer — John C. Pfeifer
• Executive Vice President & Chief Financial Officer — Matthew Allen Field
• Executive Vice President & Chief Communication Officer — Patrick N. Davidson

Need a quote from a Motley Fool analyst? Email pr@fool.com

TAKEAWAYS

• AIPA Refund Accrual -- $13.5 million in Q1, with $23 million total for the year, offsetting Section 232 tariff impacts.
• Fire Truck Production Growth -- Up 10% year over year, with sequential quarterly increases expected to continue throughout the year.
• Vocational Segment Margins -- Guided between 16%-18% for the year, below the originally forecasted 17% due to changes in capacity timing and adverse mix.
• Refuse Vehicle Volumes -- Down approximately 25% in Q1 and expected to be down 25%-30% for the full year, primarily from cautious customer CapEx.
• NGDV Production Run Rate -- Expected to be at the low end of 16,000 to 20,000 units for the full year, tied to United States Postal Service delivery schedules.
• Access Segment Book-to-Bill -- Reported at 1.6, indicating strong order activity, especially from larger “megaprojects” and NRC customers.
• Price/Cost Dynamics -- Management expects price and cost measures to yield improving results through the year, with more benefit realized after Q2 and price/cost remaining neutral for the full year.
• Fire Truck Backlog -- Book-to-bill ratio near one, supporting sequential growth in shipments across each successive quarter.
• AeroTech Margins -- Achieving double-digit levels, with backlog growth fueling expectations for further expansion as capacity improvements are introduced.
• Tax Rate Guidance -- Remains unchanged from prior full-year guidance, despite Q1 being lower.
• Ongoing Investment in Fire Truck Capacity -- $150 million of planned spending, with the majority projected to be completed by year-end.

SUMMARY

Guidance for the year reflects a second-half weighting, driven by anticipated increases in fire truck throughput, an expected ramp in NGDV deliveries, and favorable price/cost developments. Management stated, "a lot of that is within our control," citing execution in equipment ramp, margin-boosting Defense contracts, and operational improvements as primary drivers. Backlog in Access and AeroTech supports volume commitments across multiple segments without reliance on significant prebuy or external market catalysts.

• John C. Pfeifer emphasized, "Fire trucks are a great business for us. Fire departments need more trucks. We have a big backlog. We will continue to increase production every quarter as we go through the year, and that will materially impact the second half of the year."
• Management clarified tariff cost assumptions, noting that, "We are assuming the present tariff landscape continues throughout the full year," and all current inflationary impacts are embedded in guidance.
• Oshkosh Corporation (NYSE:OSK) maintained a patient, selective stance on M&A, with technology initiatives such as Canvas contributing to strategic objectives in autonomy.
• Supplier AIPA refunds are in process, with management confirming, "We started to get cash from it already this week," indicating tangible working capital benefit in Q2.

INDUSTRY GLOSSARY

• AIPA: Advanced Import Payments Adjustment; a trade-related government refund or mitigation mechanism tied to import charges affecting cost structure.
• NGDV: Next Generation Delivery Vehicle; Oshkosh's contract vehicle platform for the United States Postal Service.
• NRC: National Rental Company; major equipment rental firms that account for a significant share of Access segment demand.
• USMCA: United States-Mexico-Canada Agreement; North American trade agreement relevant for tariff calculations.
• 606 Accounting: Revenue recognition standard (ASC 606) impacting when contractual revenue and margin from customer orders, such as USPS, are recognized.
• Book-to-Bill: Ratio of orders received to units shipped or billed, used as an indicator of future demand trends.
• 80/20 Actions: Operating principle focused on identifying and enhancing key product lines or processes that drive the majority of business results or throughput efficiency.
• FMTV: Family of Medium Tactical Vehicles; a core Defense contract with scheduled price and margin improvements contributing to second-half performance.

Full Conference Call Transcript

Operator: Thank you. The next question is coming from David Michael Raso of Evercore ISI. Please go ahead.

David Michael Raso: Trucks for the year, but we are taking a little bit more measured approach there versus what we originally guided to. It all still leads us to the $1,150 number. I am sorry, I am still here. I just want to follow up on that about Transport Defense, talking about the rest of the year for the other segments. Your postal revenue is generally where I was expecting, and it sounds like are we at that sort of full quarterly run rate as the year goes on? And do we need that second tranche of orders for the cumulative accounting catch up? Do we need that set of orders to still hit your guide for Transport Defense margin?

Just curious about that catch up in the second order that is required. Thank you.

Matthew Allen Field: Sure. So the calendarization of revenue delivery is expected to grow across the quarters. So we would expect higher revenue as we progress through the year as we continue to ramp up production, but in line with our expectation and the USPS delivery schedules. We are assuming there is an order in the back half of the year as well, and so that is implicit in our guidance.

David Michael Raso: Thank you very much. I appreciate it.

Matthew Allen Field: Thanks, David.

Operator: Thank you. The next question is coming from Tami Zakaria of JPMorgan. Please go ahead.

Tami Zakaria: Hi, good morning. Thank you so much for taking my question. I wanted to ask about the Vocational segment. I appreciate the winter weather and timing-related comments. But just stepping back, do you expect any prebuy-driven demand, or is that embedded in your guide for the back half?

Matthew Allen Field: We are not expecting significant levels of prebuy. That might happen in the back half, but we are certainly not counting on it. Just for those on the phone listening in, this is really about 2027 model year emission standards and chassis. And so we are not counting on that in our guidance. Certainly, if it happens, we stand ready with capacity.

John C. Pfeifer: Yes. Our view, Tami, is if that happens, it will be upside to what we are currently expecting.

Tami Zakaria: Got it. If I could ask a follow-up on that, how much volume uptick are you planning in the Vocational segment year over year without any prebuy, normalized volume uptick for the year?

Matthew Allen Field: It is really going to vary by segment, Tami. So as we talked about before, we would see refuse vehicles down year on year without a prebuy, which is what we talked about on the last call. Fire truck production, we are adding production throughput and efficiencies to modernize that line. So second half of last year, we were up roughly 10% year on year on our production. We would expect this year to be up 10% as well, roughly, on production. So continuing to add fire truck capacity there.

As John mentioned on the call, we are adding capacity in AeroTech that comes on stream more early 2027 than late 2026, but we have plenty of capacity to support our sales projections there. So we will see growth in some segments, but on a year-over-year basis, we would expect refuse to be down, setting aside any prebuy.

Tami Zakaria: Understood. Thank you.

Operator: Thank you. The next question is coming from Mircea Dobre of Baird. Please go ahead.

Mircea Dobre: Thanks. Good morning, guys. I am wondering if you can give us a little more color on the evolving tariff picture. If I understand correctly, you did record a $13 million benefit in Q1, but then now you are dealing with updated Section 232. So how does this flow through the P&L through the year? Do you have more of a headwind now? You obviously recognized the benefits, so presumably that gets unwound to some extent.

Matthew Allen Field: Hey, Mircea. There are multiple moving pieces in that question, obviously. So the AIPA refund, we filed that. We put the accrual in Q1. It was about $13.5 million. It is $23 million for the full year. That is a portion of the AIPA. Obviously, our suppliers paid AIPA as well, so they should be getting refunds as I mentioned on the call. We will be having discussions with them on recovering those refund payments. And then you have, as you say, 232 expansion. Responding to that comes in two pieces. One, we do see AIPA fully or largely offsetting the negative impacts from that.

And two, the team in Access, which is primarily affected, is working diligently to mitigate that as well. Some of the best teams in terms of moving around production, we talked about that pretty much half of last year, and so they are working through mitigation plans there as well. So we think it is negligible to zero impact on the year between AIPA and 232.

John C. Pfeifer: There is more AIPA to come, Mircea. Just to make that point. There is more favorability to come in the future.

Mircea Dobre: I guess my follow-up is on price/cost. I am sort of curious as to how you think this dynamic evolves through the year because, obviously, your year is guided very back-end loaded. It does appear that cost inflation is actually ramping. So presumably, you are going to have more cost inflation to deal with in the back half than you do currently experience in your P&L. So what are some of the things that you are doing to address that to get us anywhere close to the way you structure the guidance?

John C. Pfeifer: I will take that, Mircea. Our price/cost gets better and better as we go through the year. You are correct, we are dealing with a very dynamic environment, both with tariffs and geopolitical conflict, which creates inflation. And we have incredible work going on the cost side, but we also have some things that go on the price side. And as the year goes by, we get more and more benefit on both of those. So, so far in the year, we have seen very little benefit on the price side. We get more price Q2 onward. And we will get more cost reduction to minimize how much price we have to get as we go through the year.

But it gets better and better as we go through the year, which is part of our confidence that the second half is going to be better than the first half.

John C. Pfeifer: Alright. Thank you, Mircea.

Operator: Thank you. The next question is coming from Angel Castillo Malpica of Morgan Stanley. Please go ahead.

Angel Castillo Malpica: Hi, good morning and thanks for taking my question. I just wanted to go back to the Vocational segment a little bit. I was hoping we could unpack the margins in a little bit more detail. I guess you noted some of the shipments slowed down and a more measured outlook in light of that. But could you talk a little bit about any impact of manufacturing costs or mix on the business and then just your expectations? And related to that, as we think about anything you can provide in terms of bookends or qualitative thoughts to help us gauge what margins now are embedded in the guide versus the 17% you had previously guided to for the year?

Matthew Allen Field: Thanks, Angel. Obviously, volume was a driver in Vocational. I mentioned mix. That is really around the mix of segments. So as you think about a bridge, as you have a mix out of fire trucks because the shipments, then you are going to have some adverse mix effect. And then we have invested in additional capacity and throughput in Pierce specifically, and so as we do not deliver those fire trucks, then we have kind of stranded cost, if you will, on the manufacturing side. So that is really how to think about Vocational.

In terms of the full-year guide, while we are not providing specific guidance by segment, we still see this as a very strong business for the year. And the margins we would expect to be in the range of our long-term guidance in 2028, which is 16% to 18%. We originally guided 17%. It most likely will fall below that with the changes to our capacity timing, but below the 17% to be clear, and within the 16% to 18%.

Angel Castillo Malpica: That is very helpful. Thank you. Then maybe a little bit bigger picture or more macro. Lots going on in terms of geopolitics with Iran. How should we think about the Iran complex impact on your business? Obviously, always sad to see any fighting, but just hoping you could talk about the bigger picture dynamic of impact any energy prices might have on your business, how that flows through or not. And then also on the flip side, have you seen any step change in terms of orders for defense vehicles or any kind of incremental opportunities for sales there?

Matthew Allen Field: First of all, the conflict drives inflation. That is how it impacts us. So when you see inflation, you see steel up 25%. You see aluminum up more than that. We all know what is going on with oil, of course. It is primarily an inflationary impact.

John C. Pfeifer: These impacts are embedded in our guidance today, so they are all considered in our guidance. We know what we are going to do about it. We have world-class teams that are working on positioning our foot to make sure we keep costs as low as we possibly can. On the defense side, our Defense business is going well. We are shipping more as we get to the back half of the year on new contracts, which is a big change in price, which is a part of the reason we are more confident in the second half. We work really closely with the Department of Defense.

We are noted as a high-quality, very reliable delivery type of a business with our Defense operations. There is not anything that has happened that is going to impact 2026 at this point, but we are highly engaged with the Department of Defense to support their efforts.

Angel Castillo Malpica: Very helpful. Thank you.

Operator: Thank you. The next question is coming from Jerry Revich of Wells Fargo. Please go ahead.

Jerry Revich: Yes. Hi. Good morning, everyone.

John C. Pfeifer: Good morning, Jerry.

Jerry Revich: John, I am wondering if I could ask about what you are seeing in Access on your telematics data in North America and in Europe. It sounds like utilization is tightening based on what we are hearing from the rental channel. Is that consistent with what you see in the data in North America? And separately, we would love to hear what you are seeing on the data front in Europe.

Matthew Allen Field: Thanks for the question. As part of our segment-level details, part of the reason that we feel better and better about the Access business as we go through the year, we do triangulate the data that we get off of our machines together with what our customers tell us is happening with utilization, which ultimately leads to where they need equipment and when they need equipment. It triangulates really well. You have heard some of our publicly traded customers talk about it. Utilization is getting better. It was not like it was coming from a bad place, but it is certainly getting a little bit better. And that is a positive sign for the Access industry.

And the used market in access equipment is also a positive sign. The used market is healthy, and so there are orders for new equipment that are coming in. So by and large, that gives us a more favorable outlook for Access.

Jerry Revich: Super. Thank you. And can I ask you on the USPS side, obviously they are waiting on funding from Congress. Can you just talk about if the production plan would be impacted at all if the order comes three months later, six months later? Can you just update on the current production lead time?

John C. Pfeifer: We currently do not think it is going to affect 2026 because we have orders on the books to produce 2026. But we expect the United States Postal Service will, and they expect to, continue to place orders on an annual basis as time goes by because we have to keep our supply chain with enough visibility to keep the supply chain primed. The United States Postal Service understands that. We understand that. The vehicles are doing extremely well. They want a consistent supply of vehicles per their required timelines. We are meeting their timelines today. So everything is going smoothly. In normal course, we expect another order this year.

I do not know if that is dependent upon any congressional funding. It is really dependent upon the budget for the United States Postal Service. But this program is moving smoothly. And with 606 accounting, that is why the order is important. When you get an order, it actually impacts your margins as well.

Jerry Revich: Thank you.

Operator: Thanks, Jerry. The next question is coming from Kyle David Menges of Citigroup. Please go ahead.

Kyle David Menges: Great. Thanks for taking my question, guys. For the Access segment, certainly orders were a bright spot in the quarter. I am just curious where you are really seeing that incremental demand by region and perhaps bifurcating between the NRCs and the independents.

Matthew Allen Field: Thanks for the question. It is largely still driven by the bigger projects. We call them frequently megaprojects. These are projects that are hundreds of millions of dollars in size as discrete projects, so think data centers and power gen and stuff like that. So that is still kind of the bulk of it. NRCs tend to get more of that, so we are weighted a bit more to the NRCs, but that is okay with us. We have great customers that we serve there to make this happen, but we are also starting to see a little bit of brightness in some private non-residential end markets. Not all, but some.

And we expect that will continue to gradually improve going forward.

Kyle David Menges: Helpful. And then just a follow-up on NGDV production. I think if my math is about correct, you might have been at around plus or minus 12,000 units of annualized production in the quarter. And I want to say the guide assumes that you get to the higher end of that 16,000 to 20,000 production run rate in the fourth quarter. Maybe just talk about how the ramp is going so far and your confidence level in getting to that higher end of the production target by April.

Matthew Allen Field: Just to clarify, our guide assumes the low end of the range. So annual production going forward is 16,000 to 20,000 units. Part of that is dependent upon the Postal Service’s schedule to receive vehicles. We will be at the low end of the 16,000 to 20,000 units this year. Production is going well. We are in line with Postal Service requirements. That is even with a couple of hiccups with snow and things in South Carolina that does not happen very often. But we are in line with their expected deliveries on contract, and so we feel good about it.

Kyle David Menges: And sorry, just to clarify quickly, you said you will be at the low end of that target for the full year or also in the fourth quarter?

Matthew Allen Field: For the full year. We will be at the low end of 16,000 to 20,000 units for the full year.

Kyle David Menges: Got it. Thank you, guys.

Operator: The next question is coming from Stephen Volkmann of Jefferies. Please go ahead.

Stephen Volkmann: Hi. Good morning, guys. Can I ask about AeroTech? That was kind of flat year over year. It sounds like you have some orders to ramp that, I guess. Just give me a sense of what you are seeing in that business. How do the margins kind of relate to the rest of the segment, and what are you doing in terms of increases for capacity?

Matthew Allen Field: Thanks for the question, Stephen. AeroTech is a great business for us. I would not read too much into the shipments being kind of flattish in Q1. One is just one quarter. You saw our backlog continue to build in AeroTech. So this business is going to continue to grow. We have great customers who want to continue to invest. They are continuing to invest. The backlog is strong. The margins— all I can tell you is they are double-digit margins in this business. And, of course, we will continue to grow our margins as we go forward.

It depends on the specific product because we do jet bridges and we do ground service equipment like cargo loading equipment and so forth. Depends on the specific products. So we are putting a little bit more bricks and mortar into the bridges because it is a really strong business for us. The ground service equipment is also a strong business. We are doing a little bit more 80/20 in that business to drive capacity improvement and throughput on the existing production line.

Stephen Volkmann: Super. And then just quickly, Matt, the tax rate was a little lower in the first quarter. What is the full-year tax rate now?

Matthew Allen Field: Unchanged from our prior guidance on the full-year tax rate.

Stephen Volkmann: Thanks.

Operator: Thank you. The next question is coming from Timothy W. Thein of Raymond James. Please go ahead.

Timothy W. Thein: Thank you. Good morning. The question is on Access. And, Matt, to the extent that perhaps there could be some upside to the 10% margin that you outlined initially— and I know that is not what you are going to imprint— but to the extent there is more upside pressure on that part of the business, I am just curious how the balance of the year is shaping up in terms of the mix within the backlog, specifically thinking about expectations as we go through the year with respect to price/cost, and how that interplays within the customer and product mix.

Matthew Allen Field: Thanks, Tim. Obviously, we are pleased with the quality of the backlog, and the book-to-bill of 1.6 was a very strong book-to-bill, which gives us greater confidence for the year shaping up to be a stronger Access than what we had originally seen early on. Price/cost, we have talked about that being neutral for the year. That is still the plan, which means the back half will be stronger as you get cost reductions and pricing as John described. In terms of the margin, we want to see the year unfold a little bit more before we give specific margins. But certainly, holding double-digit margins in this environment and for the year is important.

Timothy W. Thein: Okay. And then within one piece of Vocational we did not yet hit on— on the garbage truck side— are the volumes for the year, I know the first quarter, and we have been anticipating this year to be a softer year. But any revisions to how you see that playing out, and how should we think about cadence of year-over-year revenue change as we go through the year for that piece of Vocational?

Matthew Allen Field: Not really. Starting in the third quarter last year, we started to see orders drop off. We have talked about that on prior calls. We see this year— the full year— being down as we talked about earlier. First quarter, we were down about 25%. I think 25% to 30% for the year is reasonable.

John C. Pfeifer: I will just add some color to that, Tim. It is similar to what we have been saying. We said a quarter ago on the call we expect it to be down in 2026. That has not changed. It is about the same. It is just cautious CapEx outlays by customers, primarily the reason. But I will make a comment that we are investing in technology that customers really care about. We launched the contamination detection technology in Q1. Very positive initial feedback on that technology. The fleets remain aged. So long term, we feel really good about a healthy market for us going into 2028. 2026 is just not a year that it is growing much.

Timothy W. Thein: Got it. Thank you.

Operator: Thank you. The next question is coming from Michael Shlisky of D.A. Davidson. Please go ahead.

Michael Shlisky: Good morning and thank you. If you can circle back to the fire commentary, can you look at the overall inventories for Oshkosh Corporation? They actually were down a little bit, at least days of inventory, over the prior year. You said that perhaps fire had some additional finished goods inventory. Could you help at least quantify in dollars how much fire inventory you had at the end of the year and what other areas of Oshkosh Corporation had inventory go down? And then also, it is already May now. Have people come in to pick up their fire truck now that the weather has cleared up a bit here?

Matthew Allen Field: Sure, Michael. I am not going to break out inventory by segment. That would be a bridge too far. But I will give you some qualitative color. There are a few things. One, last year, we had substantial inventories as we were ramping NGDV. As that production stabilized, we have been burning down inventory there. In Access, we have done a really good job focused on inventory, burning down both finished vehicle inventory and some of our in-process. That team has been doing a good job on inventory. They have also been doing a good job on receivables. So overall, really strong working capital performance for all the segments.

In terms of May, yes, people have been taking advantage of the beautiful weather here in Wisconsin to pick up fire trucks.

John C. Pfeifer: We have had a lot more fire truck deliveries in the first part of Q2 as a result of that pent-up hold on shipments due to the factors we mentioned, but there have been a lot of fire truck deliveries so far this quarter.

Michael Shlisky: Great. And then my follow-up here is also on fire. Did the weather issues during the quarter cause any issues with people being able to order or configure a truck or test drive a truck with the delayed orders? And, again, did people come in here in April/May now that the weather is better to actually order some fire trucks?

John C. Pfeifer: No, that was not a factor. Order rates are still pretty consistent for us in the fire truck market, even with a big backlog. So that has not been an issue. The issue was widespread weather across the country. You saw it in the Northeast. You saw it in New York City. There were a lot of places people could not get in and out of, and those types of disruptions matter when you have a very formalized delivery process for a fire truck where people have to come in and do their normal inspections before the product can be “shipped.”

Operator: Thank you.

John C. Pfeifer: Thanks, Michael.

Operator: Thank you. The next question is coming from Chad Dillard of Bernstein. Please go ahead.

Chad Dillard: Hey, good morning, guys. A question for you on your Vocational business and the sequential ramp. It sounds like you are getting more deliveries of fire trucks in May, assuming maybe seasonality is a little bit better than expected. I am just trying to think through the exit rate in the fourth quarter given where your production ramp is. And then secondly, can you comment on your 1Q fire truck backlog trends? Was the book-to-bill greater than one?

John C. Pfeifer: Calling by memory, I think our book-to-bill is right around one. So think about it this way: Q2 will be sequentially much bigger than Q1. Q3 will be sequentially bigger than Q2, and Q4 will sequentially be bigger than Q3. In total, we will have a very significant growth rate in fire trucks from 2025 to 2026, and we expect to continue the same in 2027. When you look at the backlog and the health of the business, we are making real changes to our ability to produce fire trucks and more throughput in our manufacturing plants. Those are going to yield very positive results over the next couple of years.

Chad Dillard: Got it. That is helpful. And then just going back to that $23 million AIPA benefit, any thoughts on what the claim process will be for suppliers? Does that $23 million go out at a future date? And then the remaining $10 million for the rest of the year— how does that layer in?

Matthew Allen Field: Let me help you understand. So $23 million is the full refund claimed. Obviously, some of that was for materials imported within this year, so it will have limited impact on the year because it just changes what is in inventory. The $23 million— $17 million really is associated with prior year, so that would be the good news of that $13.5 million we accrued in Q1. So the remainder of the $23 million, in essence, will be in the second quarter. The suppliers follow the same process we do. The CAPE system opened. It worked effectively. It was very efficient. We started to get cash from it already this week. I would expect our suppliers to do the same.

It obviously is a discussion with our suppliers, and so that will happen as that happens naturally.

Operator: Thank you. The next question is coming from Steven Michael Fisher of UBS. Please go ahead.

Steven Michael Fisher: Thanks. Good morning. Just a couple of follow-ups on the tariffs there. What have you assumed, Matt, for the AIPA replacement after the $1.22 tariffs expire in July? Do you think that might be an element of your perhaps price/cost in the second half of the year? And also, were there any USMCA dynamics that we should be aware of as part of changes?

Matthew Allen Field: We are assuming the present tariff landscape continues throughout the full year. So we would assume the $1.22 tariffs basically continue and no change to USMCA. Fundamentally, we are assuming the tariff landscape extends through the full year.

Steven Michael Fisher: Okay. Great. And then a follow-up on the Vocational side in the fire trucks. I think you may have said last quarter— correct me if I am wrong— that you had about $150 million of planned spending to improve the overall throughput and production, and maybe you had spent about half of that. Just curious where you stand on that. It sounds like you are making progress and getting those sequential deliveries to improve over the course of the year and into next year. But just curious bigger picture on what are the investments you are making and when we think we could be through that and more comfortable with the overall throughput of the business line.

Matthew Allen Field: Thanks. Good memory. Yes, it was $150 million. We were about halfway through that at the end of last year. We continue to make the investments throughout this year. We expect the bulk of that investment to be completed by the end of the year. As I mentioned, we had some availability of space, getting permits, and so forth that shifted a little bit more back-end than what we had originally anticipated at the beginning of this year, but we would expect the bulk of those investments to be completed by the end of this year with most of that capacity on stream.

John C. Pfeifer: And I will just let you know, Steven, we have our best people on this. We have done this before in other segments, and we are already seeing results from the work that we have been doing.

Steven Michael Fisher: Terrific. Thank you.

Operator: Thank you. The next question is coming from Jamie Cook of Truist Securities. Please go ahead.

Jamie Cook: I guess two questions. One, John, just on the M&A front, you have been a little quiet for you, in terms of not doing deals in a while, and then I am just wondering if there are parts of your portfolio that are underperforming relative to your targets, which could be an opportunity for you? And then my second question, as it relates to the guide and it being more of a back-end loaded year, how would you characterize what is in your control versus more macro? Because from the call, it sounds like a lot more of it is just the capacity from Vocational that is pushing things out.

To the degree it is under control, my guess is people would get more comfortable with the back-end loaded guide, but any color there. Thank you.

John C. Pfeifer: Thanks, Jamie. Let me start with your first question, which is on the M&A front. We always talk about our always-on process. Always-on means we are always looking at targets. We are very patient and very picky about what we think makes sense. If you look at the deals that we have done, we like every single one of them. There is not one that we have any regrets about. They are all contributing to the health of our company. But M&A activity can be a bit lumpy. We are very focused. We have done some smaller technology deals recently. We bought Canvas, and Canvas is a really important part of JLG’s autonomy strategy.

You will see us continue to do some things on the technology front, and when we see the right opportunity— again, we are patient, we are a bit picky, it can be lumpy— we will make another acquisition outside of technology as well. On the second half of your question, which is the second half of this year, what supports our view on the second half of the year, number one, is the equipment business is continuing to gain a little bit of momentum. We feel good about it. We feel good about our price/cost building as we go through the year, and that is a big part of it.

In addition to that, we continue to talk about fire trucks. Fire trucks are a great business for us. Fire departments need more trucks. We have a big backlog. We will continue to increase production every quarter as we go through the year, and that will materially impact the second half of the year. We have also got our NGDV ramp that gets bigger in the second half than it has been in the first half, and we expect an order with 606 accounting, and an order will boost margins on the program. And finally, our FMTV contract starts to kick in. The new contract kicks in the second half of the year.

That is materially higher pricing on that contract, and that makes a nice boost to our business, as FMTVs will have a big jump in pricing and margins. Those are the primary factors. If you look at that, a lot of that is within our control.

Jamie Cook: Thank you.

John C. Pfeifer: Thanks, Jamie.

Operator: Thank you. The next question is coming from Robert Stephen Barger of KeyBanc Capital Markets. Please go ahead.

Robert Stephen Barger: Hey, thanks. Good morning. Going back to the AeroTech capacity expansions, after you do the bricks and mortar and the 80/20 actions, how much will capacity expand in percentage terms? How will throughput grow, and what revenue will the business be capacitized to?

Matthew Allen Field: I think that will be subject to a future conversation, Robert. It is a good question. We will have more to say on that in the future. That capacity— just a little bit of clarification— “bricks and mortar” is a strong term. We are not building new buildings, but we are expanding some work inside. We are upgrading some facilities, improving throughput and production efficiency, specifically around jet bridges. That takes a little time. We will be talking more about that in 2026 and more around 2027.

Robert Stephen Barger: Okay. And then, John, just following up on the last question about second-half weighting and what is in your control, and extending that thought process to 2028. Can you just reiterate why you see that path as achievable? And are you leaning at this point toward the low scenario for 2028, or do you think mid is still achievable?

John C. Pfeifer: Oh, no. We still would say mid is right where we expect to be. When you look at the demand in our end markets and you look at our backlogs that we have already got, that is the underpinning of it. Then you look at the work that we are doing to right-size our capacity to be able to deliver that— that is the confidence that we have in 2028.

The technology that we build into our products, which is right in line with what our customers really want us to do— whether that is autonomous operation or embedding AI, or in some cases, still, when it makes sense, electrification— that is all part of why we are so bullish on 2028. We are defining what the future of these end markets should look like, whether it is an airport, a construction site, a neighborhood operation. We are really defining what the future should be, which is better than what it has been in the past. That drives our confidence in delivering 2028.

Robert Stephen Barger: That is good detail. I appreciate it.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Davidson for closing comments.

Patrick N. Davidson: Thank you, Donna. Thank you for joining us on the call today. We will be meeting with investors at several conferences during May and June, and have a good rest of the day.

Operator: Ladies and gentlemen, this concludes today’s event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.