Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $629.1 million, an increase of $45.1 million or 7.7% compared to Q2 2024, excluding the impact of the divested E and C transit bus business [26][27] - Adjusted EBITDA for Q2 2025 was $58.9 million, a 63.6% increase year over year, excluding the impact of the divested bus business [27][29] - Cash flow from operating activities in the quarter was $117 million, with $11.4 million spent on capital expenditures [41][22] Business Line Data and Key Metrics Changes - Specialty Vehicles segment sales increased by $16.5 million to $453.9 million, with a 12.2% increase when excluding the divested transit bus business [29][30] - Recreational Vehicle segment sales decreased by $4.4 million or 2.4% due to lower unit shipments amid soft market demand [34][35] - Specialty Vehicles segment adjusted EBITDA increased by $24 million or 74.3% year over year, driven by higher sales and manufacturing efficiencies [30][31] Market Data and Key Metrics Changes - Specialty Vehicles segment backlog at the end of the quarter was $4.3 billion, reflecting strong demand for fire apparatus [31] - Recreational Vehicle segment backlog declined by 2% to $268 million, attributed to soft end market demand [37] - REV brand retail sales decreased by 10% year over year, compared to a 13% decline in the broader industry [35] Company Strategy and Development Direction - The company is focusing on operational excellence, investing in people and equipment, and product innovation to drive sustainable growth [10][23] - A strategic decision was made to exit the non-motorized travel trailer and truck camper product categories to concentrate on scalable operations with stronger competitive positioning [18][19] - The company is increasing capital expenditure plans to enhance throughput and efficiency across its operations [23][42] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and maintaining updated financial guidance for the year [13][42] - The company anticipates continued growth in the Specialty Vehicles segment, with mid-teens revenue growth expected for the second half of the fiscal year [33][42] - Management noted that demand for fire and ambulance products is returning to long-term trend levels, with expectations for normalized order levels in the back half of the year [64] Other Important Information - The company repurchased approximately 2.9 million shares for $88 million under its share repurchase authorization [22][41] - A non-cash loss of $30 million was recognized related to the Lance Camper assets held for sale, partially offset by a $16.6 million income tax benefit [36][43] - The company maintains ample liquidity with approximately $263.2 million available under its ABL revolving credit facility [41][44] Q&A Session Summary Question: What is the timeframe for tariff impacts on the backlog and output? - Management expects the RV tariff impact to primarily affect the back half of fiscal 2025, with some potential carryover into early 2026 [47][48] Question: What is the expected return on the $20 million investment in the Brandon facility? - Management indicated that the investment aims to reduce lead times and increase throughput, but specific return metrics were not disclosed [49][50] Question: How does the sale of Lance impact long-term EBITDA goals? - Management clarified that Lance represents less than 10% of total sales for recreation, thus having no material impact on long-term EBITDA targets [51][52] Question: Will dealer assistance continue to increase in the second half? - Management expects a softer second half for recreation sales, influenced by tariffs and consumer confidence risks, but did not specify on dealer assistance trends [57][58] Question: What is the demand outlook for the S-one 80 program? - Demand for the S-one 80 program remains strong, with orders increasing across various brands [62][63] Question: What is the current state of wholesale versus retail demand in recreational vehicles? - Retail shipments showed early signs of improvement, while dealer inventories are healthier, which should drive better wholesale orders [70][72]

Core Insights - As of April 28, 2024, there are 36 companies in Shenzhen with a market capitalization exceeding 100 billion, collectively accounting for over 25% of the Shenzhen market [1] - The leading companies in Shenzhen are expected to achieve a total revenue of 4.56 trillion yuan in 2024, representing a year-on-year growth of 7.76%, and a net profit of 485.8 billion yuan, with an 18.24% increase [1] - Major players like CATL and BYD are demonstrating strong growth, with CATL's net profit projected at 50.75 billion yuan, up 15.01%, and BYD's revenue expected to reach 777.1 billion yuan, a 29.02% increase [2][3] Revenue and Profit Growth - CATL's core business segments show significant improvement, with the gross margin for power batteries increasing by 5.81 percentage points to 23.94% and for energy storage batteries rising by 8.19 percentage points to 26.84% [1] - BYD's revenue from automotive and related products is approximately 617.38 billion yuan, a 27.70% increase, while its net profit is expected to reach 40.25 billion yuan, up 34.00% [2] - Lixun Precision's revenue is projected at 268.8 billion yuan, a 15.91% increase, with net profit at 13.37 billion yuan, up 22.03% [3] R&D and Innovation - The sustained growth of leading companies is attributed to consistent R&D efforts, with CATL holding a total of 43,354 patents as of the end of 2024 [4] - BYD has introduced significant technological advancements, including the "fifth-generation DM technology," achieving the highest engine thermal efficiency globally at 46.06% [5] - Lixun Precision is enhancing its business through vertical integration and expanding its ODM services, which strengthens its market position [5] Shareholder Returns - Several leading companies are sharing their growth with investors through cash dividends and share buybacks, reflecting their commitment to shareholder value [6] - Midea Group has increased its dividend payout to 26.7 billion yuan, representing 69% of its net profit, and plans to implement biannual cash dividends from 2025 to 2027 [6] - ZTE Corporation has maintained a cash dividend ratio of 35.0%, with a cumulative cash dividend of 8.1 billion yuan over the past three years [6]