ASV Holdings, Inc. (NASDAQ:ASV) Q3 2018 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 04:30 pm ET

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ASV Holdings, Inc. (NASDAQ:ASV) Q3 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) Chris Howe, Barrington Research.

Analyst
Chris Howe

There's a lot of things here, but I have a few questions. I guess the first is around this dealer network, you're at 270 locations, 163 in North America. You mentioned that there were some closings to get you to this net number. Can you comment just about perhaps what you're discovering as far as different markets, different densities within these markets, and as you approach 300 and optimize this portfolio? In other words, would you consider keeping the portfolio at a consistent number of locations, while increasing the inventory turns perhaps greater than 4 to 5 times to reach your long-term targets?

Executive
Andrew Rooke

Just want to clarify a couple of things. The 270 is the number of locations here in North America. The 163 I think relates to the number of actual dealers that we have. So, obviously, there are dealers with multiple locations. But that is all relating here to North America, and that's our rental and dealer distribution. With regard to the number and the density, we as, you may be aware, are looking to develop distribution and focus on key markets to ensure that we have the coverage in those key markets to obtain the market share levels that we're hoping to achieve, and that does come from each of the locations having a turn rate of, as you again pointed out, above three. Our objective there remains the same. I anticipate that as we continue the development of dealers in the key markets, that our number will go up above the 300 locations here and that will do a couple of things.

If they all turn at the level of inventory turns that we anticipate or hope to achieve, then that will obviously bode well, but it also allows us some scope within the sort of a normal distribution of any population -- almost anything that you've got the 80.20 rule, whereas a number of those dealers at any one time may not be operating at full capacity. Our job is to: A, make sure that we have the density coverage.for the key markets and we still have a number of key markets that are not at the levels where we want the distribution to be.

Although we had a great quarter I think with regard to same-store sales of up 30% year-over-year, which is really a very, very pleasing number for us, we still have some way to go for all of our dealers and all of our locations to get to those levels and that's why we're working on the things that we're working on, the dealer show, the material that we are covering with them, the support levels that we are giving them, et cetera. Does that answer the question?

Analyst
Chris Howe

That does and more. Thank you. And within this dealer network when you're selling into the dealers, what proportion would you say have the optimized mix of ASV machines to go into market and to reach those inventory