Greetings and welcome to the Oshkosh Corporation 2026 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, and Pat Davidson, Senior Vice President of Investor Relations. Thank you, sir. You may begin.

Good morning and thanks for joining us. Earlier today we published our third quarter 2026 results. A copy of that release is available on our website at OshkoshCorp.com. Today's call is being webcast and is accompanied by a slide presentation which includes a reconciliation of GAAP to non-GAAP financial measures that we will use during this call and is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months. Please refer now to slide 2 of that presentation. Our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and other factors that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks and factors include, among others, factors that we listed in our release this morning and matters that we have described in our most recent Form 10-K and other filings we make with the SEC, as well as matters noted at our Investor Day in June 2025. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. Our presenters today are John Pfeifer, President and Chief Executive Officer, and Matt Field, Executive Vice President and Chief Financial Officer. Please turn to slide three, and I'll turn it over to you, John.

Good morning, everyone, and thank you for joining us today. Our third quarter 2026 consolidated sales of $2.8 billion and adjusted earnings per share of $2.41 fell short of our expectations. This shortfall and our revised full-year outlook primarily reflect near-term challenges as we transform fire truck production. Pierce is the number one fire truck brand in America with strong demand and a multi-year backlog. To meet this demand, we are transforming production from traditional labor-intensive assembly processes to more efficient, high-flow production lines. The long-term benefits of this are clear, supporting our customers by delivering more fire trucks to firehouses sooner while delivering a more resilient and flexible production system that results in improved returns for shareholders. When we spoke last quarter, we had made specific improvements in production bottlenecks to support throughput and were in the early stages of converting portions of our production to support high-flow manufacturing processes. At that time, we identified inefficiencies around our parts flow. As a reminder, custom fire trucks are manufactured using thousands of parts. Many are unique and fabricated internally. During the third quarter, the routing of these parts led to greater production variability than we expected, resulting in lower fire truck production and deliveries. We are actively addressing these issues by improving material tracking for internally fabricated parts and point-of-use delivery, stabilizing the processes that support our manufacturing improvements, and adding experienced manufacturing leadership to support the transformation. While our production has not yet stabilized at the higher rates we are targeting, we have a clearer understanding of the material flow and production challenges that need to be resolved. We are taking our learnings from the last few months into our future planning, where we will slowly ramp up our new high flow lines in parallel with our existing final assembly operations to mitigate potential disruptions. Once implemented, we expect to see stable production levels at about 10% above last year. We still expect our high flow production lines to deliver the additional fire truck volume that achieves the 25% to 30% growth through 2028 that we discussed at our investor day last year. As a result of our revised near term expectations for fire truck production, we are updating our outlook for 2026. We now expect full year adjusted earnings per share in the range of $8.50 to $9.50 with potential timing of the next NGDV order also figuring into this range. Matt will go into this into more specifics in his section. Across the company, we see strong demand for our products driven by positive macro trends And as reflected in our backlogs, this is especially true for fire trucks and airport products in our vocational segment. And we saw orders recover during the quarter for refuse and recycling vehicles, which is a positive indicator for that business. We also see strong demand for our access equipment to support mega projects, as you have seen in CapEx announcements from key customers. Lastly, we have multi-year contracts for both defense and delivery customers in our transport segment. We believe that these indicators of strong demand for Oshkosh products provide a solid foundation for our businesses going into 2027 and provide excellent visibility for the near future. Please turn to slide five and we will review some highlights since our last call. Market conditions for the access segment continue to show improvement as the segment delivered another quarter of double digit operating income margins with strong third quarter sales. As we discussed on the last earnings call, large infrastructure investments and megaprojects led by data centers and data center related activities are important drivers of demand. Sales in the quarter continue to be led by national rental companies as expected. We have good visibility for the final quarter of 2026 and into 2027 supported by strong orders of $2 billion in the quarter leading to a $2.7 billion backlog at the end of the quarter. Demand is clearly evident and we expect it will underpin growth in the market for the next several years. We remain focused on margin resiliency as we continue to drive cost efficiency and engage in discussions with our major customers around demand trends and pricing. During the quarter, we announced a strategic investment in Nextera Robotics, another step in advancing our vision for shaping the job site of the future. Nextera combines visual artificial intelligence, autonomous robotics and digital mapping to provide customers with greater visibility into project progress We believe Nextera's capabilities complement JLG's connected equipment and ClearSky Smart Fleet technologies. This puts JLG in a position to extend its value proposition beyond individual machines to the broader job site. We will work with Nextera on customer engagement, field validation, and future applications as we continue investing in advanced technologies that can improve safety and productivity for our customers. We look forward to sharing more with you on our journey for connected autonomous products at CES next January. Turning to slide six in our vocational segment. As I discussed earlier, vocational results did not meet our expectations reflecting firetruck production challenges. Elsewhere in vocational, we are encouraged by signs that demand for refuse and recycling vehicles is beginning to recover as customers plan their 2027 fleets. We are starting to see fleets generally returning to their normal order timing as we book solid orders with several key fleet customers in the quarter. These orders provide encouraging evidence that the market will improve as we move into next year. With the college football season in full swing, the delivery of our fully integrated electric McNeillis Volterra front loader to the University of Tennessee is a good representation of how the quality and performance of our products continues to win over customers as we are seeing with 2027 orders. In September, our Oshkosh Airport Products business received an order from the U.S. Air Force for 34 Stryker 6x6 aircraft rescue and firefighting vehicles with initial deliveries expected later this year. This order builds on our long-standing relationship with the United States military and reflects the trust our customers have in our advanced firefighting technology and purpose-built vehicles to protect personnel, aircraft, and critical infrastructure. Finally, demand at Oshkosh Aerotech remains strong as airports continue to invest in infrastructure and modernization. Our investments in jetway passenger boarding bridge production are expected to increase our output Thank you. Thank you. Thank you. Thank you. In the transport segment, we believe we have built the foundation for a strong finish to 2026 and a solid start to 2027. During the quarter, we welcomed officials from the Department of War to Oshkosh as part of the Arsenal Freedom Tour, highlighting the strength of our people, advanced manufacturing capabilities, and industrial capacity. Our defense business benefits from the scale, technology, and manufacturing expertise of the broader Oshkosh enterprise, including Proven Commercial Production Systems, Mature Supply Chains, and the ability to respond quickly as customer requirements evolve. That combination of commercial capability and defense expertise positions Oshkosh well to support the long-term needs of the United States military and allied forces. Two weeks ago, at the AUSA Trade Show in Washington, D.C., we again showcased how the commercial strength of Oshkosh supports our warfighters. Our team met with key domestic and international customers who are important for our success in the segment over the next several years. One of these international customers, the Royal Moroccan Armed Forces, placed a follow-on order for Het A1 tractors and trailers earlier this month. This order, building on the deliveries that began in 2025, is a great example of how success of our units in the field results in winning additional business with our allies. Turning to delivery, we're continuing to ship more NGDVs to the United States Postal Service and fielded units have now achieved more than 60 million miles on the road. We saw modest improvement in production sequentially from Q2 to Q3 and continue to work through our production ramp where key suppliers are a gating factor. We are investing in additional supply buffers that we expect will mitigate bottlenecks and normalized production by the middle of 2027. In summary, our backlogs are robust and we continue to see evidence of long term demand across each of our segments, demonstrating the strength of our value proposition, our leadership position and resilient, high growth markets and our ability to deliver for customers. Now I'll hand it over to Matt to review our financial results and provide additional details on our outlook.

Thanks, John. Please turn to slide eight. Solidated sales for the third quarter of 2.8 billion increased 153 million or 5.7% compared with the same quarter last year. The increase primarily reflected improved sales volume in the access segment and improved pricing in all three segments offset by lower sales volume in the vocational segment resulting from production challenges. Adjusted operating income was 217 million Thank you for joining us. related to higher customer advances and improved inventory management. During the third quarter, we repurchased approximately 556,000 shares of our stock for 82 million. This month, Moody's upgraded our credit rating to BAA2, reflecting the resilience of our company and strength of our balance sheet. Turning to our segment results on slide nine, access third quarter sales of 1.3 billion were up 21% from last year. The increase was driven by higher sales volume in North America and improved pricing. As John mentioned, market conditions showed continued improvement. We delivered a book-to-bill ratio of 1.5 during the quarter, significantly higher than the third quarter last year. Orders in the quarter included early receipt of 2027 annual purchase orders from select NRCs and follow strong activity in the first half of the year. Axos achieved a double-digit adjusted operating income margin of 11.2% at 20 basis point improvement over last year. The increase reflected improved manufacturing efficiencies on higher volume, offset in part by adverse sales mix and higher incentive compensation. The solid adjusted OI margin also reflected roughly neutral price cost with improved pricing, largely offsetting higher tariff costs. Vocational sales were $900 million, Down 68 million compared with the same quarter last year, primarily due to fire truck volume as a result of the manufacturing challenges discussed earlier. Put some physicals behind the financials. We saw production and shipment volume roughly 20% below what we delivered in the third quarter of last year. Our volume also declined compared with what we achieved in the second quarter. The vocational team is taking the right actions to improve our production operations. and we expect sequential improvements in the fourth quarter. Refuse and recycling vehicle volume was also lower than last year, consistent with the softer market conditions we have experienced throughout the year. As John noted in his remarks, we are beginning to see early signs of demand recovery for refuse and recycling vehicles and now expect demand to strengthen heading into 2027. Lower fire truck volume, coupled with higher costs as we execute our manufacturing modernization program at Pierce impacted our vocational segment adjusted operating income, which was 102 million, down 49 million from last year, of which a little over 10 million can be attributed to additional spending on production improvement initiatives. Despite the challenges from our production transformation, the vocational segment delivered a resilient adjusted operating income margin of 11.4%. Transport segment sales decreased 26 million, or 4%, to $562 million in the quarter. As a reminder, last year's sales included a license of JLTV-related intellectual property to the U.S. government for $25 million that did not recur. Increased sales from the ramp-up of NGDV production were offset by lower defense sales volumes. Transport Segment Operating Income was $8 million, down $28 million, primarily reflecting the licensing of software IP last year. We expect transport operating margin to improve in the final quarter of 2026 and into 2027 as we continue to transition out of past fixed price contracts and ramp up NGDV production.

We also continue to expect an additional NGDV order this year.

Turning to our expectations for 2026 on slide 10. As John mentioned earlier, we are updating our outlook with full year adjusted EPS now expected to be in the range of $8.50 to $9.50. While our outlook for access demand is improving, we are resetting our expectations for the pace of improvement for firetruck throughput in vocational, as John described earlier in the call. The bottom end of this range reflects the possibility that we received the NGDV order in 2027 instead of this year. We now expect consolidated revenues of approximately $11 billion and adjusted operating income of approximately $850 million. For access, we expect full-year revenue of $4.8 billion and an adjusted operating income margin of approximately 9.75%. While we are seeing improved demand and production efficiencies, we continue to manage a dynamic external economic and tariff environment that is impacting raw material prices and freight costs. which is reflected in this margin outlook. For vocational, we expect revenues of approximately $3.7 billion and an adjusted operating income margin of 12.5% as a result of the extended transition of fire truck production to a modern high flow process. Lastly, for transport, we are adjusting our full year revenue expectations to be approximately $2.3 billion with an operating income margin of approximately 4%. The revised segment revenue reflects lower delivery vehicle production. We also continue to expect a follow on order from the USPS to be received by year end. This order could impact our earnings by up to about 40 million or 50 cents per share in the fourth quarter. The timing of this order does not affect production or cash flow for 2026. The low end of our adjusted EPS range of $8.50 to $9.50 reflects this order slipping beyond year end. On cash flow, I want to compliment the operating teams across the company as they have continued to drive cash flow improvements across the quarters. As a result of these efforts, we expect free cash flow of $600 to $700 million, up $50 million from our prior guidance. With that, I'll turn it back over to John for some closing comments.

Our teams remain focused on improving manufacturing execution at Vocational. At the same time, we are encouraged by strong demand in access and healthy order activity. We continue to generate strong free cash flow. Our priorities are clear. Increase fire truck production, continue strengthening performance across our segments, and execute to deliver sustainable, profitable growth over time. I'll turn it back to you Pat to get the Q&A started.

Thanks, John. I'd like to remind everyone to please limit your questions to one plus a follow-up. Please stay disciplined on your follow-up question. After that follow-up, we ask that you rejoin the queue if you have additional questions. Operator, please begin the Q&A session.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from the line of Steve Volkman with Jefferies. Please proceed with your question.

Good morning guys. Thank you for taking the question. I just want to sort of dial in a little bit to what's going on in FHIR, John, because I think, you know, last quarter we were talking about sort of a fixed worker shortage, I think, and some standardized material flow, and this quarter it seems more like you're talking about production flow and scheduling. I'm just trying to figure out, is this the same kind of issue that's getting elongated, or are you kind of finding additional issues as you work through this?

Yeah, thanks for the question, Steve. So let me elaborate a little bit on this on this topic. I might reiterate a couple of things from my prepared remarks. But essentially, of course, I want to make sure it's understood that we are not satisfied with the disruptions or the pace of improvement that we have seen in fire truck production. Let me explain the overall context of what we're doing and why we're doing it. I think everybody knows Pierce is the best fire truck brand in America. We've got a multi-year backlog, which is an indicator of how strong the demand is for the product. The challenge with this business is our capacity. So if you go back to, say, 23, 24 production rates, that was kind of indicative of what we've been doing for a long time. And those production rates were really insufficient to support today's market. So at that time in 23, 24, if we needed more units, we'd throw more overtime work at it or something like that, squeak out a few more units. But driving materially higher production throughput consistently certainly takes more than that. And it takes really a modern production system, which is what we are doing right now. We are totally transforming and putting in modern high flow manufacturing into how we make fire trucks. So changing how a fire truck moves through the plant, it means essentially the root of it right now means changing how thousands of parts reach the production line. We've made a lot of improvement in core process. Bottlenecks have been improved as we've gone through this process. Now it's about material flow on a very complicated product where every one that comes down the line is a little bit different from the next, so each one has a little bit different bill of materials. We are addressing this by putting in great people who understand high flow manufacturing, digitizing and controlling parts flow down to every single unique part. And we expect that that's going to drive stability and meaningful improvement with fire truck production long term. It's really about how fire trucks are produced for the next decade and meeting strong demand for this product. Getting fire trucks to firehouses faster and making Pierce a much, much stronger company. It's been harder than we wanted. Absolutely, it's been harder than we wanted, but we know what we have to do. We've got our arms around it, and we are going to fix this, and it's going to drive much better production as we go into 2027.

Okay, that's good color, I guess. Maybe just a follow-on, disciplined follow-on, and just your current view on sort of the trajectory of when we kind of get this behind us.

Yeah, so as we go into Q4, you know, we've got our arms around the material flow issues. We've got a lot of people working on driving specific improvements. We pay attention to that. It's about digitizing every single part. It's about barcodes. It's about routings. It's about location, kind of going into the nitty-gritty. As we get that work done, we're seeing that we're stabilizing production throughout Q4. That's why we put more of a moderated outlook for the year as we stabilize this production. We expect 10% increase in 2027, and we're very confident in that number, and we're very confident that this is going to drive 25% to 30% improvement by 2028, which has been our objective all along.

Super. Okay. Thank you.

Our next question comes from the line of Meg Dobre with Baird. Please proceed with your question.

Good morning. Thank you for the question. I would like to start with transport and with the NGDB specifically. The revenue here was essentially flat sequentially, and if I understood correctly, Your comments implied that we're not reaching full rate production until mid-2027. So maybe you can clarify all of this a little bit more. What's really going on here and what's kind of holding you back from reaching that full rate production?

Good morning, Meg, and hope you enjoyed the brewers one last night. So in terms of transport, yeah, good series. All right, in terms of transport, quarter-over-quarter, what you're seeing is some higher production. We did achieve higher rates. We've stabilized at those rates in the third quarter. On a quarter-over-quarter basis, what's offsetting that is some of the lumpiness that you see in this type of operation. So we had the one-time contract adjustment in the second quarter, and this time we had some CCAs. But underlying this is higher production rates in the third quarter. We expect that to continue to improve in the fourth quarter, at which time we'll see kind of that normative range of call it the 16 to 20,000 units we've talked about. And then as we talk about getting through these gating issues by mid-year, then we'd be at the upper end of that range. So we're starting to hit that stride in the 16 to 20,000 units annualized. And then middle of next year, we would expect to be at the upper end of that.

Yeah, so, Mick, we're moving from the low end of full rate to the high end of full rate over time.

Right, but to clarify, I think I heard you talk about some bottlenecks or something going on in the supply chain itself. Is that a factor or am I misunderstanding here?

Yeah, sometimes, you know, this is a complicated product. There's a lot of critical suppliers. We've got great suppliers or household names. and sometimes we have a slowdown because of supply in specific areas of the plant. That's why we're putting more buffers in place in different parts of the plant to make sure we can continue to increase production from kind of the low end of full rate to the high end of full rate in a more consistent way.

Okay, great. I'll leave it at that. Thank you.

Thanks, Mike.

Our next question comes from the line of Jerry Revich with Wells Fargo. Please proceed with your question.

Hi, good morning, everyone. I want to ask on the access equipment outlook, you know, as you folks are engaging in the conversations around 2027, how are you thinking about the underlying pace of inflation and the opportunity to see a normal cyclical margin recovery in that Line of business, do you think we can make up for some of the price cost headwinds that we saw this year into 27?

Yeah, thanks, Jerry. Thanks for the question. Well, first of all, we're really encouraged by what we're seeing in our access business right now. You talk about $2 billion of orders. We've got a good line of sight into what's going on. Of course, our price cost is always something that we pay very, very close attention to. with the dynamic market that we're in on input costs. We will be price-cost neutral this year or a little bit better than that. So we're keeping pace with it. And we're confident that we're going to drive, you know, healthy incrementals as this business continues to recover. Healthy incrementals for JLG, I think, as you know, is 30%-ish range. So we'll drive good incrementals. As we're in a dynamic market with steel prices and freight and things, we pay attention to that and we pay attention to how we have to pass those costs on if we cannot mitigate them through our total cost management efforts, which are pretty good. We've got really good total cost management efforts. We don't want to pass along costs that don't need to be, but when we do have to, then we will have to pass along some costs.

Super, John. Thank you. And then in terms of on the firetruck, just to expand on the comments there, you know, you folks maybe 15 years ago worked down build rates and then built them back up at significantly higher margin. And, you know, it took, I think, at the time about 18 months to do that. Here we're talking about a much faster timeline. Can you just compare and contrast the Thank you for joining us today.

In 23 and 24, kind of a slow moving bay build type production with a lot of tribal knowledge in the manufacturing operations, which is okay if you've got a market that's in very steady state, slow growth mode. But as we've seen this market continue to develop, we realized we had to drive a totally different throughput for these products, better efficiency, and that's why we've transformed it this time. So I think 15 years ago it was more about simplification of the product, 80-20 principles. Today it's about high flow manufacturing. Matt?

Just building on your comment on Q4, thanks, John, is we would expect a margin step up relative to Q3 as we see sequential production rates more consistent with maybe what we would have seen in Q2 as we stabilize production. Thank you. Thanks, Jerry.

Our next question comes from the line of David Rasso with Evercore ISI. Please proceed with your question.

Hi. Regarding the vocational fourth quarter implied margin, just curious how you're thinking about that. Obviously, the bigger picture is the 2028 guide. Now that the numbers this year are around $9, it feels like a bit of a stretch, but I'm just trying to understand where your head is on how quickly the vocational margins Anupam Khare, Jackie Nystrom We'd really appreciate some thoughts around when you think of the margins at like a billion one, billion two vocational revenues a quarter, not even the billion in the fourth quarter, definitely not the 900 million in the third quarter. How should we think about that margin level? Because we started the year at 17%, right? And that's a wide gap, and we're just trying to get our head around it. Thank you.

Fair question. Thanks, David. So if you look back last year, last year we had a full year margin for vocational, almost 16%. That in the third quarter last year was about 15 and a half, fourth quarter was a little bit over 16. So very strong performance out of vocational. This quarter certainly was a step back at 11.4%, and that was also down relative to the second quarter at about 13%, 13 and a half. And so as we look into the fourth quarter and into 2027, the way we really think about this is by stabilizing production, we'll get back to the levels of production we had earlier in the year. And as I said on the call, in the third quarter, we actually had production take a step backwards both year over year and quarter over quarter, which is moderately unusual when you're in a production plant, but reflects the disruption and level of parts flow that we saw in the third quarter. So getting back to those Q2 levels, and then moving forward from there at a stable rate is what we expect would deliver those rates. As you look into 2027, we see, one, refuse stability, two, increased production, as we talked about on the call in firetruck, more gradual than maybe what we would have thought at one point, but still a healthy rate. And then if you look at this in context historically, our guide for vocational at 12.5% is still a strong, robust business on a historic context. Not where we would have liked it to be this year, and certainly we expect to take step forwards next year, and we feel quite comfortable that we're on track for 2028 results to get that margin back into that 16 to 18% with the production actions we're taking.

Yeah, David, our margins will go back to where we all expected them to be in that 16% range. It's about fire truck throughput and it's about the recovery of our refuse business.

Our next question comes from the line of Jamie Cook with Truist. Please proceed with your question.

Hi, good morning. I guess just two questions for me. I'm sorry, I've been juggling multiple calls this morning, but John, just given where we are in 2026 in terms of numbers, can you frame You know, your 2028 targets out there, what needs to happen for you guys to get there or should we, you know, just sort of dismiss them or is it time to push it out maybe a year because of what's going on with fire and emergency right now? And then I guess just my second question, did you guys give an update on your confidence level on the additional award for NGDV? And that's all for me. Thanks.

Yeah, let me start with the NGDV award, and then I'll go into our confidence on 2028. So the NGDV award, we're confident we're going to get another order. We've been working on it with the United States Postal Service. It's late October, so the question is, is it going to come before the end of the year, or is it going to come next year? It's going to come. It's a question of when, not if. So that's why we gave a lower end of guidance versus maybe what people had expected because that assumes we don't get anything. And it comes next year. But there'll be another order for NGDVs. Let me talk about 2028. We're not pushing out our 2028 targets. We realize that we're a bit lumpy in terms of one year to the next recently. It's driven primarily, as we've been talking about, by fire truck production. So what has to happen is we've got to see strong throughput in our fire truck operations. And we expect to see that. We're doing all the work that it takes. It's been slower than what we had wanted, as you have seen. But we're doing the work required to transform and get the throughput on fire trucks. NGDB will continue to move towards a higher rate of full rate production. There's a big range of what full rate production means. The orders have to continue to come in for NGDVs. Access is growing again. You saw $2 billion order intake in the third quarter. All signs are there's going to be several years of growth in the access market, and access will continue to drive margin improvement year over year. Their margins are good, but they'll be much, much better over the next couple of years as that business grows. and all the defense contracts, the pricing that's gone into the defense contracts, that starts to show itself in Q4 more than it has. These are all the pieces that come into play which tell us, you know, that we should continue to expect what we, 2028 as we had guided when we did our analyst day.

Okay, thank you.

Thanks, Jamie. Yep.

Our next question comes from the line of Angel Castillo with Morgan Stanley. Please proceed with your question.

Hi, John. Hi, Matt. This is actually Stephan Diaz sitting in for Angel Castillo. Maybe my first one on the refuse demand recovery. You mentioned positive order trends in the quarter and the expectation for refuse stability going into next year. I guess, how much visibility does your current refuse backlog give you, you know, to give you confidence in those comments?

So, hi, Stefan. Welcome. Good morning. So certainly seeing our backlog at the same level we were last year after it was at lower levels earlier in the year, our conversations with our customers have been more positive in terms of how they're looking at 2027. So that gives me comfort. that we're looking at 2027 more like a 2026, if not slightly better, and then we'll kind of take it from there. So I'd say overall positive signs relative to where I was sitting earlier this year, but certainly not off to the races.

Great. That's really helpful, Collar. And then maybe on access demand going into 2027, we've heard increasingly constructive commentary from the rental companies, including higher capex budgets. Maybe if you could just give some additional color on how your customer conversations are shaping up for 2027. I know you had some really good orders this quarter. And maybe if you could parse out if any of the strengths that you're seeing currently reflects You know, incremental fleet demand being potentially pulled forward from next year at all?

Well, thanks for the question. I think that what we're continuing to see is that there are a lot of big mega projects supporting data centers, supporting power gens, supporting other things that are happening that typically get indexed towards the national rental companies that the customers that we serve. They see this demand continuing for a long time. If you just look at what's been financed and what's been kicked off that last multiple years. When we look at the market, there's stability in the private non-res area of the market, but that's not really growing very much. It's still primarily a mega project driven market. Private non-res stuff, that starts to grow. That'll be incrementally good news to us versus what we're seeing right now with the nationals. But today it's really driven by all the big projects that we all read about every single day in the newspaper.

Thank you. Thanks.

Our next question comes from the line of Tammy Sicario with JP Morgan. Please proceed with your question.

Hey, good morning. Thank you so much. My first question is about NGDVs. I think I heard you say you'd reach the high end of the 16 to 20K production range after 2Q next year, if I heard it correctly. So what level of operating margin do you expect at that level of production? Do you still expect NGDV margins to reach in a high single-digit to low double-digit percent range when the ramp is done.

Hi, Tammy. So I would think about it mid-year, no specific exact date. So as John mentioned, we're installing buffers which improve the flow of the plant when you have suppliers gating here and there. So it gives us more production stability. In terms of operating margin, we're not going to get into the specifics of how we see operating margin, let's say, in the near term. But I would say for 2028, which is really where we've historically talked, it's in that 10% range.

Traditionally, government contracting is 7% to 13%.

So it's in that healthy range is our expectation over the next couple of years.

Understood. That's very helpful. And then regarding fire trucks, do you plan to reprice some of the backlog, given that there's new information about Non-compliance penalties possible next year for NOx regulations or did those orders already have escalators such that it wouldn't have to go back and reprice and it would just pass through?

Thanks for the question. So in terms of how the NOx and engines work, obviously we've scheduled our vehicles and work with our customers very closely in terms of What engines are installed in those vehicles? So we don't expect any material impact on how we price our vehicles from that. We work with a customer and customer basis based on what engine is installed into those vehicles.

Understood. Thank you.

Our next question comes from the line of Kyle Menges with Citi. Please proceed with your question.

Thanks for taking my question, guys. I wanted to follow up on your comments on still expecting 30-ish percent incremental margins and access in this up cycle. And maybe we'd just like to hear what's giving you confidence in that. Is it maybe partially on some easy comps as you're lapping some negative price cost and tariff impacts? And it sounds like maybe you've got Each of your comps going into next year on incentive comp and access. And curious if there's anything, whether it's in the recent orders or conversations you're having with customers going into 27 that's giving you some confidence in getting to that 30% incremental. And maybe how to think if at all how mixed might be. Thank you for your time today.

With this level of demand and these level of orders, we should get better production efficiencies, more throughput. Those drive better operating performance that result in those sort of incrementals. We do have better year-over-year comps, as you cite, both from cost basis, as we've seen a more stable tariff environment, but also from flow-through pricing, flow-through material cost reductions we've had this year. and then lastly there are some one-time lumpy things as you say like incentive comp which has come back to normal levels this year relative to last year that also would contribute to those incrementals but the team is laser focused on driving price costs and driving positive incrementals and so that 30% broad brushstroke will have more specifics when we get into our 2027 guidance early next year.

Great thanks Matt that's all for me.

Thanks Kyle.

Our next question comes from the line of Tim Stein with Raymond James. Please receive with your question.

Excuse me. Thank you and good morning. Just to follow up on access. I'm just thinking about, you know, the ramifications of the strong orders that you've received and obviously the backlog level that you sit at today. as more of those big nationals have pulled forward some of those APOs. How does that, does that give you more, obviously it gives you more visibility, but are there implications in terms of you being able to kind of hedge and predict your cost base better just given that level of orders that sit in backlog? So I guess that's part A of the question is, Does it afford you greater ability to lock in more of your raw material and purchases such that you're able to kind of better match that price cost? And then I guess the offsetting to that is to the extent it is more filled nationals, at least today, is that and obviously there's more time to go to fill those orders in, but Are we looking at a year potentially where there's that less favorable mix next year? Again, to the extent that the market continues to be dominated by these mega projects. So I'll just ask one. That's just one long question. Thank you.

So let me start, Tim, with some of the specifics. I'll hand it off to John for some of the color on NRCs in the long term. We are encouraged by the level of orders. It does give us production stability and an outlook that we can manage our plants in a more consistent and optimal way. That makes the manufacturing team super happy and it drives cost efficiency. There are instances where we can also schedule our buys and kind of cluster things to make sure we're optimal on the ordering quantities and so forth to give us cost efficiencies. So it is helpful from a I'll call it price-cost planning standpoint for 2027 to have this. I'll hand it off to John about kind of how we think about mix and demand overall.

Yeah, I mean, first of all, up to this point in time and going into the third quarter when we have these orders, we've had our pricing discussions with our customers, and that's in light of the The volatile market for input costs that we're in. So we think that we've done some good work there together with our customers. We of course take cost out through a lot of work that we've done from tariff engineering to sourcing and other total cost management efforts. And as we continue, so we got a $2.7 billion backlog. As we continue through this, if there's more volatility, then we'll have to reopen the discussions with our customers. But we think we've done a nice job of covering ourselves as we go forward. And we'll maintain our diligence there with our customers. But we feel good about the $2.7 billion backlog. We feel good about our – we'll certainly deliver it. And as I said, we should deliver that with healthy incrementals like JLG typically does as the market starts to come back from a lull, which is what's happening right now.

Okay, thank you.

Thanks, Tim.

Our next question comes from the line of Lauren Sullivan with UPS. Please proceed with your question.

Hey, good morning. This is Lauren on for Steve Fisher.

Morning, Lauren. Morning.

My first question is on the new defense contracts for FMTV and FHTV. How are those performing so far in light of current inflation?

Good. So we're building under those contracts. The heavy we started building early this year or really late last year. So that's underway. The mediums we're starting to ramp in progressively this year, and then that'll progressively be an increasing percentage of our mediums over the course of next year. And then by 2028, we would expect to be fully building under the new contract on both sides. So overall, production's going well, orders are showing strong demand, and the contract terms are there to support an inflationary environment if in fact that's what drives our costs.

Yeah, remember, Lauren, these contracts, by the way, will go through 29 in terms of production. They have economic price adjustment clauses in them that give us some good protection.

Got it. Thanks. Super helpful. As you mentioned, a lot of the strength and demand for access equipment is coming from these national rental companies. On the independent side, are you seeing any actually cut back in capex or is IRC capex more flat?

More flattish. You know, it's spotty. There's thousands of independents that we serve. Some are in good markets, depending on regionally where they're located. Some are in good markets. They're indexed. to the right end market in construction. Some are in not so good markets. But if you look at the total, that's kind of flattish. We're kind of seeing, we haven't yet seen a turn in the kind of private non-res markets outside of the big mega project.

Got it. Thanks. We have no further questions at this time. Mr. Davidson, I'd like to turn the floor back over to you for closing comments.

Thanks Christine and thanks everybody for joining us on the call today. We're attending several conferences in November and December. We look forward to meeting with you there. Take care and have a great day.

Ladies and gentlemen this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.