Sandy Bugbee - IR Tim Sullivan - CEO Dean Nolden - CFO.

Mig Dobre - Robert W. Baird Steven Volkmann - Jefferies Mike Baudendistel - Stifel Ben Burud - Goldman Sachs Andy Casey - Wells Fargo Securities Joel Tiss - BMO Capital Markets.

Greetings, and welcome to the REV Group’s Third Quarter 2017 Earnings. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sandy Bugbee. .

Good morning and thanks for joining us. Last night, we published our third quarter 2017 results. A copy of the release is available on our website at investors.revgroup.com.

Today's call is being webcast and is accompanied by a slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures that we will use during this call, and it’s also available on our website. Please refer now to slide 2 of that presentation.

Our remarks and answers will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements.

These risks include, among others, matters that we have described in our Form 8-K filed with the SEC last night and other filings we make with the SEC. 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.

All references on this call to a quarter or a year are to our fiscal quarter or fiscal year unless otherwise stated. Joining me on the call today are our President and CEO, Tim Sullivan; as well as our CFO, Dean Nolden. I will now turn the call over to Tim..

Thank you, Sandy. And thanks to everyone on the call for your interest in REV Group. We are pleased to report another strong quarter of EBITDA growth and expanding profit margins. And we remain well on our way to achieving our initial goal of IPO to double EBITDA and hit 10% EBITDA margins on a consolidated basis by 2019.

We are proud of our third quarter results, and we believe they validate the diversification and operating leverage in our model as we continue to achieve our group targets despite a slower quarter in our commercial segment.

Dean will provide more detail regarding our segment results shortly, but I wanted to start with some key business updates from the quarter. First, we announced a collaboration with Ford Motor Company to provide our dealers with the complete catalog of genuine Ford Chassis parts.

This agreement enables our dealers to offer a high level of quality end user parts and support for the more than 150,000 REV Ford Chassis on the road today.

Secondly, we announced the acquisition of AutoAbility which closed on September 6 and is a best-in-class mobility van converter that specializes in the manufacture of rear entry wheelchair accessible vehicles. We are pleased to welcome AutoAbility to the REV Mobility group.

The combination of the AutoAbility and our elder AutoMobility brands now enables us to address both the consumer and commercial mobility markets with the complete product offering of mobility vehicles.

Thirdly, we announced that REV subsidiary, ElDorado National-California was officially awarded the LA County Transit Bus contract expected to be worth over $400 million. The contract is to supply 295, 40-foot CNG powered transit buses and includes a provision for an additional 305 buses for a total of 600 buses over five-year period.

We received the purchase order for the first group of 295 buses on Friday, September 1. Also, as we communicated last quarter, a key part of achieving the 10% EBITDA target is the introduction of new products. As you will see on slide 5, we introduced three new products to the marketplace during the third quarter.

Our recreation segment introduced two new products this quarter. First, we introduced the first American Coach Class B RV called the American Patriot.

This is a great addition to our American Coach product line and we will expand not only the American coach distribution channel for this product but it will also help in expanding our Midwest automotive distribution channel. Many American coach dealers want a complete line of Class B vans.

Secondly, we introduced the FleetWood Class C Pulse right at the end of the third quarter. Most dealers will get their first glimpse of this product at the Elkhart Open House in a couple of weeks, but those that have seen the early prototypes have expressed a strong desire for the product.

This RV is made on the popular Mercedes Benz chassis and has proven to be a strong and growing market segment. Our third new product is the Collins Low-Floor Bus. This is a great innovation to the standard accessible bus entry. The ramp provides a much safer, faster and easy way to board accessible passengers.

Lastly, our third quarter, in the fire and emergency and commercial segments was slightly impacted by a Ford Transit chassis recall, which halted shipment of any product in the Ford and Transit chassis until a fix was in place. The parts and fixed recall has been received and the Ford sanctioned repair is being implemented.

We will ship the impacted vehicles in the fourth quarter. Now before I turn the call over to Dean, I'd like to close by reaffirming our full year fiscal 2017 financial guidance which is detailed on Page 6. To refresh, we expect full year consolidated net sale to be within the range of $2.3 billion to $2.4 billion.

Secondly, our expectation for full year adjusted EBITDA will be in the range of $157 million to $162 million. As in previous quarters, our guidance includes our acquisitions year-to-date but does not contemplate future M&A activity. Now let me turn the call over to Dean to further discuss our segment financials. .

Thanks, Tim and good morning. As you saw from our release last night, and on page 7 of our presentation, we reported 13% growth in net sales and 36% growth in adjusted EBITDA in the third quarter 2017 versus same period last year. As a result, we drove 130 basis points expansion in adjusted EBITDA margin to 7.6% despite lower commercial sales.

This also represents 90% basis points of sequential margin expansion as we are realizing the benefit of our integration of KME and continue to drive gains across all of our businesses from our procurement and production optimization efforts among other items.

We generated 36% growth in year-over-year adjusted net income and reported adjusted earnings per share of $0.33 for the third quarter up from $0.31 per share in the third quarter last year even with 40 million higher current quarter average shares outstanding.

As Tim mentioned, we’re very pleased with our growth in profits and expect similar gains from increased operating leverage in the fourth quarter and year ahead.

Please refer to the tables in the appendix of our financial results slide deck in our earnings release for detailed reconciliations of net income to adjusted net income and adjusted EBITDA and a reconciliation of as reported sales and EBITDA to the related organic amounts for the quarter and year-to-date. Now please turn to Slide eight.

Our F&E segment grew sales in the quarter by 20%, which was driven partly by the impact of the Ferrara acquisition in April of this year, but also from strong growth in the segment’s organic businesses in the quarter.

F&E sales growth in the quarter excluding Ferrara was 6% driven by a higher mix of high content fire apparatus and an increase in ambulance unit sales.

For F&E, we are pleased to report that our EBITDA margin for the segment grew 240 basis points year-over-year reflecting operational improvements in our F&E businesses including KME and the shipment of KME units in the quarter that were ordered after KME’s acquisition last year.

We are now largely through the legacy KME backlog and are seeing strong year-over-year accretion in our segment profitability and expect that improvement to continue for the remainder of the year. In aggregate, the F&E backlog declined 9% versus last quarter, reflecting the normal impact of strong seasonal shipments in customer order patterns.

The end markets for fire and ambulance vehicles remains strong and backlogs are healthy. Lastly for F&E, the third quarter was our first full quarter with Ferrara, which we acquired in April. Our integration process is underway, but we did not realize significant synergies in this quarter.

This business is performing as expected and we look forward to improving profitability from its pre-acquisition levels over the next year. On slide nine, you’ll see that our commercial segment revenues declined nearly 16% in the quarter as we continue to focus on driving profitability through our various commercial and operational initiatives.

The year-over-year sales impact this quarter was consistent with prior quarters and in that it primarily related to our shuttle bus business, but also this quarter included impact from our mobility van business is ramping up after completion of its production relocation earlier in the year.

The end markets of all of our commercial businesses remain strong and we are very encouraged by our sequential quarterly increase in commercial segment backlog.

Our backlog in this segment grew by 6% in the quarter, which does not include the award of the LA County transit bus contract of which the 295 buses Tim referred to, we’ll hit our backlog in the fourth quarter.

In addition, we remain encouraged by the results we are seeing from the rollout of our platinum dealer program due to these and other initiatives we expect the commercial segment to return to year-over-year growth next quarter.

Lastly, our EBITDA margins for commercial declined 100 basis points year-over-year to 8.3%, again impacted by the lower revenues and the mix of other vehicle sales in this segment during the quarter. Turning to slide 10, our recreation segment again drove impressive sales gains that produced total growth of 40% in the quarter.

On an organic basis adjusting for the acquisitions of Renegade in December and Midwest in mid-April revenue growth was still a robust over 9%. We are pleased with the growth in both the Class A and Class C product categories driven by the end markets and our market share gains.

As Class A growth is less than the other motorized RV categories, but the market growth coupled with our market share improvements were especially beneficial given those are higher margin coaches.

Additionally, the acquisitions of Renegade in Midwest make REV Group best positioned at the right time to take advantage of robust end market growth for Class B and Class C RVs.

For Renegade in Midwest, we also continue to realize cost savings on major components and chassis and are benefiting from commercial synergies that are driving incremental revenues for the combined group.

These acquisitions also serve to improve the overall profitability of our recreation segment given the inherently greater EBITDA margins they enjoy. Lastly, but most importantly, we are very pleased with the progress in our recreation segment profitability as adjusted EBITDA doubled over last year and margins grew nearly 200 basis points to 6.5%.

As you know, recreation profitability improvement is a key aspect of our overall REV growth strategy and we expect to continue this trend as we enter the fourth quarter and next year. As among other items, we will continue to realize the financial benefits of the operational improvements we have made to lower costs in this segment.

I would like to provide a few other REV Group detailed modelling items related to our full year fiscal 2017 financial expectation.

We expect depreciation and amortization of $34 million to $35 million for the full year, approximately 65 million to 66 million weighted average diluted shares outstanding, capital expenditures of approximately $50 million and full year interest expense of between $19 million and $20 million.

Thanks for your time, and now I will turn the call back to the operator for question and answers..

[Operator Instructions]. Our first question is from Mig Dobre with Robert W. Baird. Please state your question..

Hey good morning everyone. Maybe my first question on recreation. Very good margin there, much better than what we expected and I believe better than what you were thinking initially at the time of the IPO. So, I guess a little more detail on what went right versus your initial plan to be able to deliver this.

And the sustainability of margin as we’re looking at the fourth quarter and into next year and how you are thinking about the margin potential of this business and the path to reaching 10%?.

Yes, well it’s several things Mig. And as you can imagine the biggest thing was the opening of the three new plants last year. By opening them up we’ve been able to create a lot more efficiencies in the flow.

We were really very, very psyched in the one large plant that we had indicated and the three new smaller plants, so, allowed us move various products into those plants. So, for instance we moved our high-end As into their own plant, we moved the low-end As into their own plant and our Cs into their own plant.

And by specializing and moving them into better locations we were able to get the efficiencies. The other thing that really kicked in nicely in the first three quarters of this year and it continues to ramp up is our ability to source better. The sourcing really is starting to pay some nice dividends in the RV business.

And last but not least, it’s no secret that we had some less than stellar products being shipped three years ago. Those products typically have 12-month warranties on them and those have now moved out for retail lots, they are all effectively gone, been retailed and the warranty periods are starting to expire.

So those three phenomena really created the basis for the improvement in margin..

I appreciate that. And in terms of -- it sounds to me like a lot of what you’ve described are items that are sustainable in nature. As we are looking towards fiscal ‘18 it seems like you are running ahead of schedule in delivering margin.

How should we be at least high levels thinking about margin for next year?.

Well it’s a process. Those initiatives will continue to improve; we believe our profitability performance in RV. I think we also position ourselves really well for new product introductions. That’s been slow. We really introduced a number of new products we wanted to in fiscal ‘16.

We will have 11 new products introduced at Open House in two weeks which is a record number for us. Those have been really fully designed in a way to be more efficiently build and more profitable as well. So yeah, it's a process but all the building blocks are in place, and we just now have to continue to execute. .

Alright. And then my follow up, just trying to understand your guidance, your top-line guidance for the year a little bit better.

If I'm looking at the low end of the guidance the $2.3 billion, unless there is something in acquisitions that perhaps I'm not getting or not modelling right, that really implies a pretty significant ramp in organic growth in the fourth quarter.

So, I'm trying to understand how we should be thinking about the sources that this step up in organic in the fourth quarter.

Is it all driven by commercial any kind of catch up there, or are there other segments we should be thinking here?.

Yeah, you're correct. If you look at the acquisition so far, this year obviously Renegade was fairly small, Midwest was small, FERRARA was not small. But it really is going to be ramping that up as well. The organic growth is really coming from all segments, with the exception of probably the [indiscernible] bus that's been fairly static.

Backlogs are really - have built nicely in the shuttle bus segment, but that's going to be I think relatively flat in the fourth quarter. Everything else that was contributing, everything else is up which is obviously nice situation organically. .

Our next question is from Steven Volkmann with Jefferies. Please state your question. .

Hey good morning. Just a detail item first.

The Ford Chassis that you have sort of pushed into the fourth quarter, just order of magnitude on revenue there?.

Yeah. I mean kind of round numbers it wasn't huge, because what we did do Steve is we shifted some things around for instance, on the ambulance side, the Ford transit chassis are [type] [ph] for ambulances. We shifted emphasis to our modular designs or type 1s and 3s.

Kind of the same thing on bus, we did have some other chassis that we're able to try to move around. But all-in-all it wasn't huge, it was kind of rule of thumb about $10 million in revenue that needed to be made up, some of it was, some of it wasn't. And all that will flow out now in the fourth quarter. .

Okay, great.

And is there any margin impact from that, I mean do you have to pay people overtime or are they sort of building the wrong stuff in the wrong order or anything like that that could be sort of a short-term hit?.

No, nothing that we can measure. I mean obviously if you're moving production slots around, there is some hidden cost in that, but nothing that we really measured that was meaningful in the quarter. .

Okay great, thanks. And then on just on RVs, Tim, where do you think we are in the various cycles? I mean there has been I guess a little concern around the As maybe that things might be slowing. I'm just curious your perspective based on your order books and conversations and so forth.

What does the cycle look like from here?.

Yeah that's a great question. I think we're viewing As in a little bit different light than maybe others because they have been softer as you know. Towables, Bs and Cs very, very strong and that’s why obviously we are emphasizing a lot more in those areas to make sure we're grabbing the opportunities are available to us in the marketplace.

As have been fairly quiet. And our belief was is that people are going to gravitate up towards the As. We still think that's going to be the case, but we're kind of viewing it a little bit differently too. We plan to take share in the As. If you go back two, three years we were almost a zero non-player in the A market.

And I think with a lot of the newer products that we're bringing to the marketplace and now with the strength of our brands, even though the As may not rebound as quickly as far as in overall market as maybe have been anticipated, we plan to get more than our normal share. So, time will tell, I guess I don't really know.

If history repeats itself people are going to move into the As. It's been a little slow to happen. We're going to hedge that situation by making sure we got better product into the A market to make sure that we're going to get a bigger piece of what is out there to be had. .

Our next question is from Mike Baudendistel with Stifel. Please state your question. .

Just wanted to ask you on this announcement with the Ford relationship where you can sell the Ford chassis parts through your dealers.

To your knowledge, do your competitors have a similar arrangement with Ford or is it relatively unique for you?.

It’s unprecedented quite frankly and it took us 18 months to get it done. This has never been done in the automobile industry before.

We’re very, very pleased by the fact that Ford was able to allow us to do this very unique, very special and very, very pleased, I can’t say how pleased I am that Ford understood what we’re trying to do, which was quite frankly emphasizing and getting more genuine Ford parts into the channels that were not seeing the flow of genuine Ford spare parts..

Also wanted to ask you, I mean how would you describe the RV inventory at the dealers currently?.

Very low, that’s the good news. This is the time of the year, where the summer buying season is coming to an end and the dealers have run their retail lots pretty low. In two weeks, I think you understand the cycles.

We have two really big buying cycles in the industry Open House, which is in two weeks, the week of September 18th I guess it is in Elkhart. And then the model year change which is April, those are the two really large buying seasons.

So, retail lots are way quite empty, the dealers will be coming in with their cheque books in two weeks and that’s when the backlogs start to rebuild..

And also, just want to ask you.

Do you have any preliminary thoughts on how the hurricanes could impact your various businesses, I mean either selling more ambulances or inventory that’s damaged in places? Are there any preliminary thoughts there, I know it’s early?.

It early, actually we’ve seen a little bit of activity obviously with the Houston situation across to some of our product lines. We have not been affected, the good news is, I guess from our standpoint we have two service facilities in Houston and a manufacturer facility in home Louisiana. None of those were affected in any meeting for way.

I don’t expect anything really big to come out of that unless there is products that are damaged. But quite frankly, municipalities are pretty good about having contingency plans in place.

So, fire apparatus, ambulances, some of the emergency type vehicles are moved out of harm’s way very quickly, when hurricanes do arrive, that’s what’s happening right now in Florida. I was on this morning though with our two facilities in Florida, we have one as you know in Orlando and we have our fire apparatus E-ONE in Ocala.

These guys are kind of experts in Florida and knowing how to deal with this situation. So, to answer your question, don’t see a real big pick-up that might be a little bit activity and we also have fingers crossed that we’ll be in good shape from a plant standpoint in Florida. .

Our next question is from Nicole DeBlas with Deutsche Bank. Please state your question..

Good morning. This is [indiscernible] on for Nicole. Just as you know, as we’re starting to think about 2018 do you believe you can sustain this EBITDA growth for another year.

Are there any other puts and takes that we should start to think about?.

Well, if you go back to our business model that we released at the IPO, we are obviously on track and above that performance for 2017. We are starting them up in 2018, we have a number out there that we put out there at the time of the IPO and we expect to hit that also. And that is a 30% plus EBITDA growth year-over-year ’17 to ’18.

It’s too early to confirm guidance. Obviously, we have acquisitions that have to play into those numbers and things like that, but we feel very good about the model that we presented at the IPO. .

And then can you comment a little bit more on the expected cadence of the shipments of the LA bus order?.

Yes, that were pulled out really slowly. LA requires prototypes to be built first and they evaluate those prototypes to make sure they are exactly to the specifications that they wanted. Then they’ll fully test it and make sure. They take very cautious view especially with a new contract like this where you are going to have in excess of 600 buses.

This really will affect our backlog more towards the end of ‘18 and meaningfully into ‘19 and ‘20. So, it's a great situation to get into a big contract like LA but it going to have minimal impacts in our earnings in ‘18. .

Our next question is from Jerry Revich from Goldman Sachs. Please state your question..

He everyone, this is Ben Burud on for Jerry. Good morning. I just want to start with pricing in SME.

Can you just give us some color on how that progressed in the quarter, for both fire and ambulance? And then can you may be kind of give us some color on the impact of the higher content vehicles in both of those business lines?.

Yes, well both fire and emergency have product mix that has to be taken into consideration. We continue to increase pricing based on what we believe is appropriate, whether it be cost increases, inflation, and/or innovative ideas where we think we can get more margin. So that continues, that will always continue go.

Really what’s happened more I think this year on whole SME area, is the product mix in fire. We have a much larger portion of aerial shipments going on right now. And those tend to drive higher margins there, as you know they are twice the price of the pumper.

So, when aerial starts to flow through there is a nice pick up in margin opportunity percents are similar but obviously your pricing off of a sell price of 1.2 million plus versus 600,000. So, it’s been primarily more in product mix I think so far, this year. But we keep our pricing discipline in place..

Got it. And when going through the presentation, I found a curious amount of attention AutoAbility gets for being a $8 million revenue company.

Can you kind of discuss your plans for that business and what kind of revenue synergies you might be able to take advantage of?.

Yes, we love companies like AutoAbility, these are really small operations that have been undercapitalized and have limited channels but it’s a great product. Chuck Fortinberry who is running, put that business together and running it has just a phenomenally good product.

So, this is a type of acquisition we love because we bring it into our portfolio. We are able to help capitalize the business, increase the channels, provide all the things that Chuck really has been limited to doing.

So, we see Renegade type result from AutoAbility or a Midwest Automotive where we take a great product, move it into our portfolio, enhance it with sourcing, get in the cost out enhancing the go-to-market channels, all those types of things. I would love to have another 20 AutoAbilities in the portfolio..

Our next question is from Andy Casey with Wells Fargo Securities. Please state your question..

Thanks a lot. Good morning. And the first question is the reaffirmed adjusted EBITDA guidance midpoint implies Q4 of about 55 million which is a little bit it’s 35% of the full year midpoint. That seems to be a little lower than historical seasonality for Q4 to be roughly 40% of the full year.

Is the difference really between 35% and 40% rounding in your opinion or is there something occurring in this Q4 that would drive modestly lower seasonal performance?.

This is Dean, Andy. No, I think when we stated the Q4 expectation a couple of quarters ago, we were looking for the second half and the backend loaded nature of our business. It's really kind of a rounding effect that's happening and performed a little bit better in Q3 as you saw so that's comes out of Q4 by our flat guidance your math is correct. .

Okay, thanks Dean. And then if I could dive a little deeper into question I believe Steve was asking earlier. The commercial adjusted EBITDA margin kind of went up 80 basis points Q3, '16 versus Q2, the math was on $6 million higher revenue and then Q3 this year it dropped about 90 basis points still up year-over-year.

But I'm just wondering about the sequential seasonality of the margin that's on roughly $4 million lower sales this Q3 versus Q2 '17.

What would normal seasonality for that segment be, and then what factors drove the sequential decrease this year?.

I think the one factor driving kind of the anomaly that you're playing cards is the way in which our school bus business kind of went through the year quarter-by-quarter, typically the third quarter is its strongest quarter.

This year we had some opportunities in the second quarter and drove higher sales in that business in the second quarter which is not your normal seasonality for that business. So as a result, given that it's inherently higher EBITDA margins than the segment overall, that really caused the year-over-year comparison to be a little bit different. .

Okay, thanks Dean and then lastly on again on the commercial segment. I think in your commentary it sounds like the markets are firm, once you get through some of the distortions that occurred in Q3, you should start to see growth.

Is that an inference that we should see growth as early as Q4 or is that something in the future?.

You do see a little bit before, but the backlogs are just building now. It's going to be I think more of a Q1 phenomenon and probably into Q2 of '18..

Our next question is from Joel Tiss with BMO Capital Markets. Please state your question. .

Just some housekeeping stuff, the accounts receivables and the inventories went up a lot.

Is there anything behind that or just acquisitions?.

Partly because the acquisitions obviously if you're looking year-over-year or versus last year and we had the Renegade, Midwest and FERRARA businesses. But they also went up organically, as you can see we have expectation for a good fourth quarter, seasonally strong fourth quarter. So, building inventory for fourth quarter sales.

And so, it's normal seasonal pattern, but we have a good expectation for the fourth quarter growth and that's sitting in inventory at the end of the third quarter..

And anything with the receivables, are you kind of changing some of the terms on the business or you're helping the customers sort of without having a finance division, you're helping the customers to buy more product or the same thing just because you're expanding your sales so much?.

I think as we make some of these acquisitions, and we've said it in the past in terms of our long-term strategy direct versus dealer channel, we're doing more direct selling now with some of the acquisitions and some of our initiatives, that causes some lengthening of DSO periods.

We do have a couple of larger customers that are doing a lot of business with us that have some larger balances, no collection issues just timing. But I think the biggest item is either acquisition in addition to kind of the shift towards more direct selling will drive the DSO a little longer. .

Okay. And then other liabilities that's also just related to acquisitions.

The other liability category up $32 million?.

Yeah that's primarily related to acquisitions. .

Okay. And then in the future you guys are going to talk about the individual deals in terms of the amortization. And how accretive each one can be and all that sort of stuff. I know it's for your first year but as we roll into 2018 where that's going to be something that you don't want to break out. .

No. I think, we want to be as transparent as possible Joel. I think probably in the larger deals they are more meaningful, we’ll break that out. On these little ones, we haven’t paid that much attention to. We love them and we’re going to be big pay-outs for us.

But I think on the bigger deals, we owe that to you to be as transparent as we can to understand how we look at these things. .

Our next question is from Nigel Coe with Morgan Stanley. Please state your question. .

Good morning, guys. This is Dillon coming on for Nigel. Just want to touch on price costs in the quarter. Obviously, you guys are still able to show some robust margin improvement in fire and emergency. It was just kind of where I believe you guys have been intuitively had some decent exposure to steel inflation.

So just kind of want to get your thoughts on the raw material outlook for 2018 and maybe how that could flow through your margins?.

Yes. Still is not, how do I put it. It’s meaningful, but not nearly as big as something like aluminium. We buy just a huge amount of aluminium. A lot of the chassis that we buy that have steel in them, for instance, we’re buying almost 2,000 chassis a year from Daimler. Those prices are kind of locked-in in our contract with them.

We work with them if there are issues, but we pretty well have that type of our, that cost basis of what we build locked-in. We also locked-in aluminium last year for a relatively short period of time for a couple of years.

So right now, no issues, raw material costs are contained and really, we see, really no prospect that we will have to do anything individual there..

And maybe just a second one. If you could kind of give us an update on the M&A backlog from here kind of I know you mentioned during the process, you saw pretty healthy backlog of opportunities.

I would think commercials, so just want to see the thinking has changed there at all and maybe where you guys are seeing that kind of greatest amount of low hanging fruit?.

I’d tell you, there is the backlog of opportunities is huge. I think we made the comment before that our lists, there is over 100 potential targets and the small like AutoAbility, medium size like Ferrara and some big things. And we look at our model from a timing standpoint.

Our strategy is clear, we want to bolster our current product portfolios to make sure that we have size and girth in the markets that we operate in. But we’re not against going after a fourth leg to the stool if that makes sense as well. I’m just [indiscernible] because this is consistent.

We have four to five acquisitions in the hopper at any one point in time and that will be continuing as we go forward. So, this company can grow nicely as we’ve shown organically, it’s also going to grow meaningfully through acquisitions to as we progress forward. .

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back over to Tim Sullivan for closing remarks..

Well, thanks everyone for joining us today. Obviously, we’re very pleased by our third quarter results. We’re in a good shape and that’s why we reiterated and reconfirmed our guidance for the year on both revenue and EBITDA. And as is done this call, the model that we present at IPO is still valid and feel free to reference that at any point in time.

This company is in hyper growth mode and we plan to continue that, we plan to perform and meet your expectations. Thanks again for joining us. We look forward to talking to you again at the end of our fiscal year 2017 wherein we’ll be providing you with a hard and fast guidance also for 2018..

This concludes today’s conference. You may disconnect your lines at this time and thank you for your participation..