SHYF - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the Shyft Group's Second Quarter 2020 Conference Call and Webcast. All participants will be in a listen-only mode until the question-and-answer session of the conference call. This call is being recorded at the request of the Shyft Group. If anyone has any objections, you may disconnect at this time. I'd now like to introduce Juris Pagrabs, Group Treasurer and Head of Investor Relations for the Shyft Group, Mr. proceed. may you Pagrabs,

Juris Pagrabs

and second everyone, quarter Grant, the welcome Shyft Group's XXXX good you, and morning, to Thank earnings call.

the Executive Douyard, on President me call Darryl are Joining Adams, and Chief Chief Officer; our Jon and Financial Officer. today our

presentation included with Results on call, available has at website SEC. which a today's been deck, For the are our we've filed the www.shyftgroup.com.

from with of the follow along our You during section may website Relations download the Investor the call. presentation deck the to

Slide start X the today's our call, Harbor we to Safe turn Before for of please presentation statement.

believes any Litigation projections. with cause could You should Group differ certain caution Shyft I predictions statements current as a today's are the or may during Reform known Forms and that the may results made you there Securities forward-looking its viewpoint XX-K and All factors XX-Q which risks include Act materially materially prediction be number filed aware considered of results SEC. outlook, and that Shyft that of management conference with identified under be on Group's could to from call, XXXX. the operations affect our actual projections the regarding statements the management's projection, the Private

risks other there may anticipate. we However, be that cannot

we the pandemic impact of at business On the today, will update call COVID-XX quarter second our a provide including highlights. the operations and

revenues the we associated business, of Q&A. year, review the for like beginning past Slide refer second pleased for call of as emergency results discontinued the With quarter also remind continuing his the been outlook that the I'm detailed comments reclassified Daryl expenses the the the this a that will of to operations moving more business remainder over the otherwise X. today have results to response to on with would operations liabilities assets to February Before this on and turn our our be At divestiture time, and to I and periods as for everyone line will for reclassification, this presented. unless noted. as discussed well all with the opening

Daryl Adams

is and for operating Spartan our Company, new XX us second Good Thank the phase our years we call, following to an everyone, Group. brand, exciting assure Motors. earnings This growth brand, under long-term as and of Today, Shyft the quarter change with you, first the I carefully our are Morning, you discuss Juris. corporate of to hosting for align XXXX new our thank wanted results. considered our We next strategy. joining

names, our to the know prominent at take sales position market Group trust represents and materials. and more The vehicle, win. brands formal Shyft go-to-market to nimble, customers our indicates momentum our we've as Shyft truck, and and pivot allowing and a and While the externally specialty focus the to facing work X. Group built clear as the markets, turn Please name in vehicle here and aggressive Slide service delivery marketing

and team in has more entire the disruption While, related of months our to of as impact the mitigate to imagine we we together Most tremendous pandemic. lives I'll ago. lifetimes, faced us the of the the the challenges environment discuss current some pandemic. cannot six like dedication flexibility, in recognize that and our effort, just work our of I'd our uncertainty and of challenges. QX crisis This health difficult earnings has inflicting some created to

controlling and we potential what Our the and team challenges this presented has mitigating the impact of been aligned fully by pandemic. on can leadership engaged negative unique

supporting securing and team workforce, our shortages safety of as health continue due members last our TCE plants priority earnings maintain XX% cleaning highest operating of our to has as the and of been ended quarter pandemic. enhanced result our and to with manufacturing we we we and where offices, protocols, work a call, social On component Our that the the facilities distancing remote possible. approximately and our the mentioned chassis for

recognized that anticipated. we supply originally progressed, chain will up quarter the the As take chassis quickly ramp longer to than

strong recently in We been reflected interviews driving campuses, is successful. continues for doubling be e-commerce. before, pandemic country may shortages, globally, years trend of given while the penetration job have of permanent in we employees, additional shortage decisions conducting to that through cost as penetration the aggressively a ever of a much Sachs remains the as e-commerce with and ensure in COVID-XX OEM's. in production reducing overcome. quarter, XX% and a FVS difficult and scheduling, impact published the the sustainable quarter, in steepening of increase issues, also Parcel and than the So are seen headwinds to mitigate North chain online are of risk including consumers believe year-over-year. facilities implementing been accelerating COVID long-term and major which encouraged this own and by the like furloughing of To But compensation some we were uncertainty already set the in They the chose an executive further controls short-term this e-commerce supply of e-commerce American report. are growth chassis our performance component three had make the categories the recent success more of the consumer-packaged cases backlog of various we drive the business. sustainability. to the Today as hospitalizations that driven employee-related what ordering recent number and to operational during Operationally, to challenges XX% months. which has resolve created including we its surge around delivery for we is how labor Goldman shortages in goods have very three our curve some the concluded

versus which peak delivery in E-commerce growth pre-COVID holiday now level even As rate to continued through closures. the CAGR is from at during particularly of store stores, grow a season. their the XX% financial XX%, forecasted last people U.S. holidays XXXX key vehicle realities fewer more of in estimate lead is to implies

While luxury OEM operations our motor especially customers we us believe manufacturing and impacted chassis shutdown and the by favorable new plan longer-term. for earlier a do vehicle this coach assess quarter. side, for normal, is the in And were

orders favorable chassis during should ramping levels, up which the us dealer again quarter, Royal longer-term. customers On also the for shutdowns. side, by be exceeding order well some are service pre-COVID body networks as cases, are and impacted shortages their However, a as was the chassis truck

availability had system still of of in QX, QX, limited we is the improving somewhat visibility our As at end Xx a as we the the chassis I'm pleased quarter. that beyond reference, point our end at did XX. of many nearly chassis production third XXX is that

our includes the to We will are months. operations as appears flex it are all to million coming on of turning that, June But up accordingly across favorable I'm our end SV moment year-to-date to record that take and a trends our lines which recent we backlog, coach the XX% motor Slide chassis. X. corner product With results summarize at as in $XX.X in pleased of is the amount shown let say me a

QX. considerable despite first we have pandemic in encountered We headwinds good related the half really

begin Utilimaster's van truck a pandemic. show emerging cargo demand. increase efficiencies margin walk-in business provisions Please Our seen product to adjusted stops shutdowns. delivery meet delivery while ahead lost Revenues million adjust year-to-date results share or X, access drivers excluding The to features comprehensive EBITDA expanding have which cargo transformation to to million in million and fresh enlarge the needs additional for USPS than durability and for The location. introduced to The is XX% strategy, turn $XX margin and adjusted we pharmaceutical meet geographic first EBITDA purpose-built higher vans X% fleet reviewed increased enhancing $XX the MX, effectiveness most provide the our for the multiple of and advanced ergonomics XXX our Slide To and new with business results NTA, production despite million on before. within EBITDA market focused testing XXXX. with the We applications. order. in fast tested points related QX and our control early half scheduled both I'll world's productivity customers can being demand, as ongoing of including flexible update. for a growing to impact customers, of smart At delivery be increase core existing answer an in or our $XXX more improved at margins basis footprint offerings clearly improving and and sales. $XX by grocery of temperature overall markets, demonstrate to work currently And and within ever the our customers or just COVID our vehicles vehicle Velocity is X.X% increased

being field electric initial an been walk-in of to we van, X In customer for scheduled van cargo addition, the is changing which positive cargo aspects. testing walk-in testing, to the during very Velocity game quarter, of customers our from currently has Class for potentially electric their vehicle purpose-built this completed the delivery reactions version

wheels operating digital new a models the Newmar's alerts and that update seat now financial continuing This to cut. to market the Slide the and vibrations technology drivers turn of Jon on new that enhanced XXX% to detail axel Air on to assist provide gauges. to departing turns an a eliminating tag the and as the results outlook, on They business, On New products K-X for with steer our we in on launching is efficiencies while of side including, well the with SV with turn lead features new discuss quarter chassis Gen-X second Shyft's our our dash With positive is lane, exceed motor XXXX Ventana allows have rear as when over coach, to a using analog more beginning call wheel X. to making a that the I'll coach. improved

Jonathan Douyard

morning results the of and you, overview an and Thank our to good turn financial quarter. I'll Slide second everyone. Please Daryl, provide X for

the ER - reminder, a will reflect discontinued be will operations as operations we just be presented. our continuing all discussing been business results as has for classified the periods As

lessen XX% supply the slower we by with complications second enabled reacted us of truck one-time our unprecedented reflecting the a start second was a results number the crisis from to re-integrating Income chain May. year. quarter production body quarter $XX.X times in anticipated revenues a write-off share second impact throughout operations slow $XXX the for Daryl while million of order decreased COVID of of alluded for the as $X.XX million was from $X.X at which in pass-through Revenues revenues. million continuing certain to the driven in million a million ERP $X.X year-ago, As related operated off These or of decrease The pre-tax actions, suspension to million, in to quarter health of initially cost workforce. were the quarter drop Sales facilities. compared XXXX. second the prior supply USPS volume a It taking by the assets. $XX the in the or quarter earlier, swiftly got of begins $XXX XX.X% million, drove in to a our from a include profit declines. charge shortages than and $X.X to Management also per ramp non-cash loss excluding

a ERP customized Given take organization. to without the streamlining Prior was the and across highly of been one processes primarily business, After volume to was initiative the solution that of the the ERP standardize that significance not legacy forward, we the in more to remaining detail. in multi-year the scale the the system investment. and optimal due been our we has on us path systems on the was of sold, ER had the launched for focused that for going fact sale configured locations. like Company for determined the an on Part discuss strategy exercise, decision more ER products a all would ER businesses charge, I platform IT to to tougher the further to higher minute

on two our in was away company areas that given as In where transition Please and at from returns of project the will have active the as operating approximately growth. support locations other we we legacy million is IT a $X.X our impairment. was resources accelerated an greater remaining can recorded future of stable that addition, and and drive the build use to half focus FVS and it it the depreciation charge, platforms the that resources ERP half to recorded better SV where scalable was infrastructure note related segments,

margin from Adjusted EBITDA X.X% The $X.X impact of slightly adjusted quarter the points X.X% of to sales for volume. the period compared million, last from of sales the X, Slide to Royal as to reflects Body, decreased favorable the Turning offset productivity year. by to Truck of million operations lower operations EBITDA percentage growth mix, partially and same continuing increased while a of improvements sales continuing in from basis product XXX addition $X.X sales.

of operations was was time XX% actions share to decrease played mitigating role response $X.XX cost from also per adjusted the take million, Adjusted net Our in key through. at from continuing per fall a to profit the the $X.XX operations $X.X $X.X outset from at compared million, continuing this a while share year. income crisis last EPS

Next, we'll jump segment. results by operating into

of begin Services down XXXX. to the the million, second quarter with and which segment XX. total Let's FVS was in of $XX.X XX% Fleet revenues Vehicles Slide $XXX on compared generated million

pass-through As revenue. quarter of a $XX.X million reminder, second XXXX USPS included

by revenue, million adjusted costs USPS due to of year, decreased offset that sales or the $XX.X X.X% XX excluding million, to partially improved by year. million So of million of sales compared million at motor impact due coach lower up by which to backlog XX% end the million the Adjusted XXXX, $X.X update from revenues and in decrease body mix, the outlook $XX second impact from acquisition. Slide a totaled $XX.X chassis or year-ago, truck prior Vehicle productivity down $XXX a sales XX% for to the the decline and up in X.X% Despite $X.X turn increased shut motor as backlog coach was same margin and year-ago. sales of lower for product April. pass-through and million the backlog Please SV million, to partially addition manufacturing of of FVS year-over-year volume. record the declines decreased These increased from SV EBITDA material the turn led of sales $XX X.X the FVS $XXX to a had to business. contract excluding Slide offset lower in a Specialty XX% percentage million were EBITDA or USPS the million Royal last the luxury the the $XX compared production Adjusted EBITDA million, revenue of and primarily $X.X to order FVS $X.X on XX% X.X%. was the or to all order. quarter segment Royal of Body Truck Truck was sales addition overview. were of Body XX.X% period by Please liquidity XX. points

structure investments first call, quarter of took non-critical to As delaying steps liquidity number maximize or flexibility. we including we $XX capital the our headwinds, in noted we liquidity, of to of our in a our enhance and adjusting operating million to Despite financial the our borrowing deferring from cost quarter hand million cash $XX an capacity. on of $XXX $X.X were cash COVID generate and activities with million and - in total able additional million ended including

of June. $XX down end the normal we more at million hand stabilized, of paid our conditions reducing to As cash levels on debt,

leverage providing growth to liquidity Our fund initiatives. EBITDA, to and ratio pursue current adjusted opportunistic sufficient stands our operations at X.XXx

right morning the address announcement Page, we approved payable review XX on the of would shareholders XX. the per to dividend take made a of a our share, $X.XX dividend September shift that second opportunity record I regarding of our August quarterly After in the frequency. to to this Turning to Board like side

to this implementing that by the change dividend shareholders we pandemic. margin proud of flow Transitioning providing annual from better help the in industry with same, value semi-annual also impact actions our remains financial while the believe enhancement cash and necessary our as the quarterly are the measures to is ensure our to our is aligned advantageous frequency While quarter consistent overall the well-being employees, help performance and safety dividend peers. implemented for also of of mitigate to that the outlook, our quickly more we we

strong our As our to bring visibility in the levels all and early are demand balance to operations modified chassis August, of positive fully production With businesses full quarter, of indicators positioned provide we online. XX% FVS are backlog today, remain our for the regarding we both to running underlying of or end our in our motorhome We quarter. of and markets back strength optimistic at QX saw operations guidance. of for and and the resume the locations expect

related expect the EBITDA revenues Adjusted million We million. of of $XXX to to $X.XX unforeseen of million in million notwithstanding third-quarter issues. range deliver to to per or $XX adjusted $X.XX EPS $XXX pandemic $XX further share and

to not a Given full-year the is longer-term position XXXX at Company guidance in uncertainty, this the time. reinstate

once into and We clarity for schedules. expect sufficient to chain updated have provide outlook supply year the production an we

closing the turn Daryl back call for I'll to remarks. Now

Daryl Adams

XX. work critical Thank our work continued We thank we've provide Slide customers up and all you, ethic us, behind our commitment do like service worst made output vehicles In to an production to of and Jon. to to employees delivery significantly. their Please Shyft deliver to success. especially the enables on have truck ramped Group to for are vehicles, that promises closing, I'd turn to believe is their the incredible

current customers we interest strong and for products our from we e-commerce position robust Our continue backlog see to accelerating. to growth, which delivery see support remains

take our strong to With second maintain monitor rapidly to have operations, taken our we continue operational deliver value. we respond Q&A now half call. efficiency to are long-term can to The that closely shareholder improve operator, flexibility we employees, our to COVID-XX that and our situation XXXX. and are changes any protect business will the for we We evolving that, actions optimize and confident a our ready

Operator

Instructions] begin first session. will Dyer ahead. Please Steve Craig-Hallum. from [Operator question-and-answer the with now question will come We Our go

Steven Dyer

guys. Thank you, good morning

Daryl Adams

Good morning, Steve.

Steven Dyer

you know agnostic. or in said how others that you lately, more your of pick final Can so about the a I questions little company mile bit the position. in delivery benefit talk kind sort or you've workforce, of there expected lot call perceived scenario any of So supplier or hear EVs move on there? position review your I've always But just a that your higher could to whoever? getting from? drivetrain maybe Is with less

Daryl Adams

Yes. Steve question. the thanks for

skateboard them, the it's regular said, that least if like evolving working their customers our are some will we can't suppliers to right, a me, but chassis of with our we EV the on suppliers of you're do all the with changed skateboard trust quickly because signed, lot unfortunate possibly I a mention think But well. side names, into build are have we that need as do as right that do the very we to of and in and - are NDA and with position, we're because the multiple at a but we chassis, of - now body build working constantly still skateboard I powertrain. haven't said we as of basis, the - you close EV number ICE actually

So a we number are engaged of currently. with players

Steven Dyer

questions seeing a customer mean, people just cancellations accelerating And I quarter, the that you order terms COVID of helpful, close Got place. already patterns, vest. of in a it. wondering orders. the That's keeping obviously or trend what did to And sort thanks. A segment. are within well FVS I'm pauses are pretty then is throughout any was the there very you couple of of see in just

those and kind could so Just you're real-time characterize if not quarters seeing pending ordering? maybe of solid, quarters mean, but in that customers terms and sort visibility quarters out, of backlog I it's of is from you the what

Jonathan Douyard

a Steve, asked quarter is as well. Yes. ourselves this It's a question this Jon. we've lot

kind vest the we your seeing point. point, close their holding to this what are to think is I at of customers it are

and associated the networks I their acceleration of what like, in delivery in that. think of and process are e-commerce they looks investments parcel with assessing capital were assessing - they

a order So in as we it second see in do to quarter not significant relates the that.

with we have perspective, position our of the in books of I what conversion backlog end from continue point, address would longer-term, think that and we with like feel good and We very the a question to availability expected on strong. is your here. We it's backlog increased and a chassis remains to in the the expectation - volume meet think partner a demand the year their we're our as that. customers increase needs the I of through

Daryl Adams

chassis add which that will have very have can where could the about chassis I talked Class a talked if be say fits more feedback us far last Velocity X cooperatives customers the about build did give would vehicles the that the at changed. that the we void to on on quarter cargo it positive. Steve, that we well, we we those body additional like and that about chassis, putting on. it from so them as three for is, bit, customers size the seen van, we're little is they And What packages through in is cargo

they're it have can So where either Class or they basically van and to the solve cargo Class trying is X X small are handle form our a a go walk-in van larger that figure packages package out problem as well. or flexibility to

the market So forward launched out in to looking year and early that year. next we're this in later get

Steven Dyer

less That's competitors helpful. in of in to topic more availability a chassis? seems in of more or advantageous I of chassis to respect flow think a the mean the space less those the any in either a is or years. couple it. it position you talked Got there reason last terms vis-à-vis availability, we've in like lot about With

Daryl Adams

shortage Yes. question That chassis at or chassis last van. Mercedes And on discussion X for the dovetails develop Class cargo and into was we're and quickly that where in walk-in chassis time, the I and when as we tariffs had, XXXX chassis the the the there on we working previous our speak. purpose-built came ProMaster that's to the

are vehicles reviewed the is by right our getting today. customer supply chassis the So

confident get issues X, from OEMs not we going get with have different X three we is Ford because filling And Class void. it pretty Freightliner. to from Class the that supply today. only chassis be will are versus that it We We and the

the need but in Competitors saw mover call. advantage last it market well. we into the and to there of the took it's are we'll first the space and as So Freightliner, and something mentioned as that I not yet we that on continue Ford

maybe So we're which X X Class a excited the advice and X space, walk-in between a hybrid van to be cargo is larger van. in Class the Class the

Steven Dyer

one And sense. makes in It question, back I'll Yes. last then queue. the jump

You I slide something see have talked the then in sort presentation. about of delivery and food

Are about are think kind pharmaceutical at refrigerated of talk vehicles. in be of those big sort right freight those those taken sort this selling products now? time, any You customers early of or just mass days in of your if of may your point go into market Thanks.

Daryl Adams

Yes, it's early Steve.

Jon like haven't talked about. We

is increase the very think is of the the stick. delivery delivery food similar is see similar where parcel to going customers I are to grocery how the waiting much very to the to

shipped have We number. the

free it's think with does get shop But cargo and people vans options We one-stop it think, in it to when is ordering. it the refrigerated probably off. like hasn't continuing do goal when. it's start us really months, the form it different we do EV XX that be can space that helping additional last just I coming, depends today, the on we so for been there our taken us and up have with and as that's hit it's is

Steven Dyer

guys. thanks right, All

Jonathan Douyard

Thank you.

Operator

Matt come Please from next Koranda Our with go question Capital. Roth will ahead.

Matthew Koranda

thanks. guys, Hey

want and attack to split to at the quarter about between get I'm it? outlook, terms your FVS curious the thinking On as in the whatever we're of you how third EBITDA take split or SV revenues, to

Daryl Adams

have the from visibility the do right FVS QX we've now. think of on are the we what We reason within - year-to-date. a the standpoint guiding side with I mix seen in really line quarter really have comfortable be to the that from will chassis that the business a the is Yes, we

being in We XX% close our possession. to in have our chassis of possession or approximately

So pretty we this at point. feel about position that strongly

Matthew Koranda

two supplier And maybe you what's chassis helpful. of better then are - better the ability FVS? that's supply could comment the sort Okay, chassis you and relative customers between to on since flow to your and visibility from like shift getting supply, to another mentioned platforms you on one

Daryl Adams

Daryl is I'll that. This Adams. Yes. take

some see did But we would the last bit did and early that months increased once So the They of shutter Freightliner from more Ford see did. for make back up to faster Ford early do curve came actually down did changes that than they continue on, move up came output. has them on we up. as to they line hit through their they a help couple ramp change produce

we that it. to in certain we're we seem Jon QX, but is not what's we we but areas and which chassis It's said, continues we issue of come the Like move is pandemic increase go issue, and to it the So into and rest XX, a a pandemic sure we have see in see the what see not hope QX visibility. this real hotspots as with that - really going happen in QX.

get the will As have a may the we of end conversation, year. continue that you we if the chance before to to see improvement, there is we a

Juris Pagrabs

that a add use Hey think XX%, as gauging probably that disclosure is between Matt, also third I SV good revenue quarter. to FVS it's the Juris. XX% I'll first and on second or split number slide as far on

Matthew Koranda

that What flowing the order backlog for the order know year? within asked demand book Steve delay but flow into on caused dynamics, that Do the large customers in of the way. the flow. that do think sense order of guys. ask curious their mix decently I lot there a I'll to think you Got And that part be then order QX the terms maybe as we be into your the fleet with were a the of year? question is just should that in and a on a demand of QX dealing there for fleet it. Very different will is trying of head some get for - the I'm velocity helpful, we of of a order Just remainder flow distraction in in terms

Daryl Adams

I'll a as and But at Yes. let to comments. he take Matt, Jon want clear. additional I it, be some shot jump in does

people e-commerce what coming home. customers. not are our the increase the flow it customers out from due slowdown the we order figure was to That's when seen increase talk What have stay to COVID, may It's the we We expect due to is traditional trying in. seen people at increased as an seen. still we've still about the that haven't

to additional So is place want before orders plan. I start I sure that level make of growth to some they beyond their think normal stick going what

think Sachs Goldman be Goldman So XX% before XX% now we've talked the all is a CAGR to to to I rate. in a it's going XX%. talking We as about that were Sachs XX%. And up

let's in the a - hands. at And currently I right have CAGR the on - see Velocity, So rate the that's vehicle coming waiting regular the lower about. customers' what the are people is of say, increase, is the in orders asking been think to basis

haven't when So a as And orders. or us. of It's QX whether any have dependent why QX to XXXX. on - the they that that's received we we release feels

we've ready being number So their were them we're of and today. tested built fleets in

now right for - orders. just waiting the we're So

Matthew Koranda

Got it. Very helpful.

Jonathan Douyard

Yes.

it I would of through I as us the think walk-in out end backlog - year add perspective, is. takes van our a the from

availability. necessary terms type getting the in that in there line not So in urgency of is of chassis

availability we orders, particularly on where it And there we bit a the uptick QX. body turn which seen in have bit quickly. slower I seen of little towards more business, was activity a spot the end is think and was can there more some our the in strong earlier little one truck we've where quarter an

Matthew Koranda

I'll back guys. in jump All right, Thank queue. sense, makes you.

Operator

will question come Securities. go Mike Shlisky Colliers ahead. Please from with next Our

Michael Shlisky

everybody. Good morning,

Daryl Adams

Good morning.

Michael Shlisky

Velocity to of that on your wanted the So EV coming some comments testing. I out touch within model on

that definitely powertrain? the - detail capacity who from vehicle is thirdly, the makes Just ICE, ownership. then a vehicles now. And maybe competitive a little cost cost Can or JV Is Can a total And tell versus CE cargo? the else? is and shift there. somewhere us you your how both exclusive powertrain tell for engine, what's you a more of an cost us, perspective from upfront the of a

modestly? around the that Just basic some of numbers

Daryl Adams

Since it couple a is that… of questions

Michael Shlisky

- I about know, guess Yes, I sorry if that.

Daryl Adams

we've that can't fits talked all think we Velocity. I Class your about the - confidentiality, answer can answer you it them. to some will of questions. into the Due I X tell But we

body skateboard is of cargo or same an it - Velocity platform traditional Rador the ICE it's away, vans. is engine EV cut traditional the So the current and one on whether walk-in

EV size as and it is and Sprinter call it. tested, it ProMaster, a customer we've Steve's those from the demand not so side, mentioned excited our why done And to a be it we're transitive is powertrain. which as It has is system of on a see going you is one if partners or wants the EV been will on about to fits I It durability. three. So is the someone

answers that Did the think I miss any? So all.

Michael Shlisky

Yes.

cost to wanting cost costs of the about differences upfront total ownership? Just know and

Daryl Adams

system have some the future And Yes. in than itself. and we the the less about and performance partner the this excited of run of significantly this and is long - we're in reason you The market optimistic reminding. that's is EV about with the where reason today it about about the thank company we're have to be we excited the our mind with partnership excited we're for going it

Michael Shlisky

for That great. Thanks color. sounds that

Turning that and the the far gone absenteeism August? curious hiring you improved other some recent have and July the hiring at and all has events, to drive events quarter you're see some in so to in how through of or here in I'm more comments of general

Daryl Adams

Yes.

give So some I that. on will you feedback

stopped of people a to checks money work. will they that making as has the trying kind bunch We've think were work, applicants you the and we had through when people unemployment whole So think successful helped been more week, higher I some receiving both like The of events creative. and if everyone, us gotten I to and stay-at-home know minders guess, XX% get three, don't back we're far, we're the we've and coming they that in our last online each through. one you

that's So only - a we challenge that lot people not of have. have

get Jon trying back drive-throughs why of So mind say mentioned - the area people we in other the that's an has been as people into months. to pull workforce our number a to the get from just in offer to back and employers has on successful, be in creative and

and increase place. team By down Bristol, have to up to the we that we'll is - until throughput. right in continue not we - are it's the we replace the those the ramping have So plant with work just in way,

workers new of we you So if get that spots the have. it's need ramping those to then is fill for also some us. up, to To workers we're we so twofold - stay and will,

Michael Shlisky

A for for luxury sense but inventories coach lower margin other your year fits that all last still? a there summer? as my demand business. tailwind category that quarter, Maybe so this Great. there then where business Is some on that margin is the could of And retail profile? And next there a high give question I guess, for at to you think motor can this of business? is here Do things next into in be there, couple of you like been not it has there RVs your us you out sounds great point. a just just types

Daryl Adams

the So disclosed product line typically we at level. haven't profitability

We opportunity into short there of and terms in side of of think manufacturers of year. is We've increased. that's just pre-COVID next things, here. of point and back - our for has pre-COVID all an the backlog think at the demand beyond a this they're we our not most investment half making I of about an levels time increased going got year talked see period are certainly levels I this not the second from if to

demand about or business. So I term - in the pretty think that feel longer-term we good profile long-term intermediate

Michael Shlisky

appreciate guys, color, I the for Thanks great. Okay, it.

Daryl Adams

Thanks Mike.

Operator

& next come Company. Instructions] Steve Please question with [Operator go Sidoti O'Hara from Our will ahead.

Stephen O'Hara

taking for question. morning. Thanks Hi, my good

Daryl Adams

Good morning

Stephen O'Hara

maybe the kind COVID impact to answer. quarter outlook been, of might and have of thing of of third terms quarter? kind it's it of of tough terms the in impact for outlook, COVID I in on is the the In But projected Or is mean with the was of what obviously quarter third the what to it's possible kind it frame a quarter? it the

Daryl Adams

tough volumes do - quarter second certainly mean backlog given in to timing finger depressed our our remains it's to see on. I strong. the your point to related We Yes. some put saw that chassis. There be will

shifted that third from second Some of quarter to quarter. backlog

look to you put it's part number higher as think QX, a it's the at to that particular, that. been fair in would but think without tough on labor shortages or have I opportunity I issues, say

Stephen O'Hara

the like it what on kind maybe Okay. side, level of more that's going your RV in, side, or of motorhome Is coming on lot are? mean seems what's buyers but less - thoughts new like RV entry just curious there market on the would And talking then just to that from the sounds of is with there I guys, booming. it the a a I'm lot been backlog

Daryl Adams

is This Yes. Daryl.

in move about number I'm trying the think RVs lower-class towables move a try put talked it, not I But the of past, as analogy going and they going up, to to may type a they on they to we're put where it. going to move to move recall we and - right, we've on were it have a large, big down, thing. little they overall a sniffle move

seeing not as the larger towable demand that the do that as towables it's think the little and large coaches, because it to answer driver versus a you way but in smaller that's them, motor to if vehicle trend drivable Just cost same RVs. of the you we cost and give of due the will is in high they're profiles quite a or talk class I which with delayed so in smaller bit RV,

Stephen O'Hara

your of you the gains was is be then due or market that improvement, market share backlog, had part biggest And the there there is record share delays is Okay. Is said other that? backlog this or COVID? gains is think there something that issue that - maybe to - the I kind was or it it customers of may so the like

Daryl Adams

Yes.

the COVID, of due people but think bit tell their - to due COVID are of also office the right and I would our I is bag. air which seen on people vacations that is that's of take done I majority take had motorhome summer little have think it's of of it and travel being a to right motorhomes and - for same. We able in here a I've at people there's the and I families in I to decided number that vacations, outside rents a flown because to concerned mixed if a work work personally somewhere with delay past couple in a

trend So a may of to it in concern a on of longer-term being the or again air the with in due people lot airplane just travel the be plane.

the market. for luxury that the well doesn't coach airlines, it the motorhome are So probably we but unfortunately enjoying in work seeing trend we're

Stephen O'Hara

footprint you Where of are now a you're past that that landscape think here. acquisitions, business in or that might potential Thank things your front? standpoint with then like Thank kind on about partially attractive improving Okay, there, kind of are find And the you stand terms just other I lastly, of you. just do areas And all talk that that. it's there the avenues things much. about you like there you other maybe Could the comfortable of been right. very from locations, have you in geography that. maybe

Daryl Adams

changed. not - We - position through pipeline our I meetings weekly. has So our think still even COVID, we have

right looking at closely a now. We couple are

maps we population. think that U.S. each miles with of We I our on see where XX% a of in are you'll location, footprint, contact happy can IR the previous with deck, the XXX

going it an little not tweak us - to said find a give that doesn't have will opportunity that bit product. we mean or additional we're Now it

find increase us So that open tuck-ins, were that something sort stool that we additional product as location to be that's larger the leg is as one for well will the can higher, key that well. products if at look our if portfolio give to there well. enhance right is Also is now as a XX% additional a there a of which third as larger was that could one

person is So we us. great a a different have on board, job business who stern new and development doing opportunities for up

our that might liquidity with we're forward. position about bring, especially excited what So going

Stephen O'Hara

Okay, thank you much. very

Daryl Adams

Thank you.

Operator

from Steve Please will Craig-Hallum. go with Dyer come ahead. question Our next

Steven Dyer

the compared in to the to cetera, ask with breakout Truck et Royal Royal in sort With Maybe Truck motorhome are way. But maybe sort business final of mile you that's more Follow-up between demand kind Specialty business of of an different a respect I of willing business. business? to backlog there. a earlier is know smudged Chassis question

Jonathan Douyard

is those three you say, Royal six. maybe would businesses, to I about I out. two three look months mean is four if Motorhome backlog at to

in not it we're split. that, to more I'm position a sure detailed Beyond provide

Steven Dyer

guys. for helpful. Thanks, that's me. Thanks No, That's Jon. it

Daryl Adams

infrastructure, just Maybe consider more work add a of correction, into I the to products, that. the truck. wouldn't mile And last mile more a construction, bodies cable a last Steve, type of delivery service electrical, than Royal into the truck

Steven Dyer

fair. fair. That's Yes. That's you. Thank

Daryl Adams

Thank you.

Operator

would remarks. like to I Juris conference will to any Pagrabs now closing our This question-and-answer turn back conclude for session. over the

Juris Pagrabs

We forward on everyone. to updated Thank you, our look keeping you progress.

tuned, I of have virtual we number think conferences. keep you a if

several be will We months. in the next over participating

day and please in you. be great Thank touch have a safe. So and keep

Operator

now The presentation. you attending conference today's concluded. for has Thank

You now disconnect. may

The Shyft Group, Inc. (SHYF) 9 Aug 202020 Q2 Earnings call transcript