Earnings call transcript Q2 2023

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Operator

Good morning, Welcome to the Shyft Group's Second Quarter 2023 Conference Call and Webcast. All participants will be in a listen-only mode until the question-and-answer session of the conference call.

As a reminder, this call is being recorded. I would now like to introduce Randy Wilson, Vice President, Investor Relations and Treasury of the Shift Group. Mr. proceed. may you Wilson,

Randy Wilson

by joining and call Jon Chief Their be Financial for Daryl Douyard, joined Adams, Officer. followed will remarks President Executive prepared question-and-answer this you session. I'm morning by Chief a Thank Officer; and

a call, on been available filed deck today's website. SEC For presentation is the and that's included we've also our with

different be that call -- in filed the to could results materially expressed subject safe primary XX-Q harbor our we please risk begin, from for are results SEC. identified turn Before actual which Today's cause to contains materially conference those presentation to affect or that our are to and statements, the implied. Slide risks Forms XX-K management X of believes forward-looking with our statement.

and discussing measures, useful performance. be believe are company's information evaluating will we non-GAAP in which the operating performance We

business will a our call, we more During review provide updated of detailed to today's before results the a moving on outlook. XXXX update

open Q&A. to Daryl then line over will for it to Please Slide and turn Adams. the We X, I'll turn

Daryl Adams

our the made in delivering prior production with our of vehicle communications, in expectations, robust great Good track on remain blue by you, were of for And review half to in us the XXXX progress thank with arc priorities, milestones. we results second and on cash long-term quarter line generation. the our Thank key We joining our results. performance consistent quarter strategic and the you execution collect blue strong arc second Overall, for morning, specialty Randy. year. vehicles on in highlighted

market that our experienced as quarter, efficiencies overall performance. further grew services and conditions While impacted fleet vehicles the in operational we weakness well end as in modestly

made by We specialty ending truck we adjusted down quarter the in strength reducing Second decline, softness capital, record the sales Despite led more X% of solid and last delivered resulting margin in working offset performance million than financial year-over-year, our of EBITDA, in $XX with quarter and vehicles. body versus by delivery strong year, mile motorhome. last product sales in lines flow service XX% both $XX position. in were progress a up in on cash operating million

X. end areas. to including favorable on remains last we Slide mile market markets, commentary our infrastructure, and believe key outlook delivery in Long-term leader are industry as positioned Turning these in and our we the well

the accelerated signs we throughout of weakness we However, will dynamics. and conditions market starting businesses, seeing provide what fleet our details now services. quarter, saw broader vehicles and to within due evolving demand on with additional second economic I are

level to After We concerns the public year-over-year in previously influencing a customers immediate discussed and last mile their of regarding and as as package volume customer specific our parcel with including well are several strategy. listening dynamics factors market. declines influenced there uncertainty buying fleet decisions, commentary, in continued speaking delivery

late also As the a now in reduced to delivery orders, vehicles, long-term levels chassis leading quarter, gives reduced confidence higher to us customers and time, supply the which dealer need an the production case second of the in At experienced of result, We impact for more same for second and -- we have expect levels the hearing ongoing reductions significant we're half prospects in there last-mile is year. that from vehicles. chassis cancel production. seen OEM in we customers see and inventory the defer

volumes current are while productivity environment, long-term decisive replacement clear e-commerce requirements needs we While on regulatory projections support have to future within to FES, the In focusing vehicle been and will reduce emissions deferred, that including it taking purchases. drivers. response fleet growth orders efficiently actions is adjusting to drive operations current

and and locations. into expanding by customers new our quality product refocusing customer deliveries efforts improved Driving and on-time sales

vehicles. specialty to Moving

to continue a zoo bodies, vehicle and upfit Our by infrastructure demand service for increased truck products, vehicles. supported work vocational manufacturing police perform including well, contract spending and

expand positive continue, executing to we We expect to growing our strategy and focused on the and geographies are products needs to our of trends market. these support the

our facility, and XP police we which body opened royale service recently our bodies both Nashville and encompasses For vehicle launched example, upfit.

motorhome chassis of by For Entering softening business, broader RV expected our we been XXXX, the after conditions has demand. multiple industry economic general see years challenged growth. to

accelerate in seen However, the quarter, in light production inventory. reduced schedules of second RV manufacturers the higher we and their have demand further have dealer decline

market in we and market, the our segment, in horsepower That said, market than share to experienced continue despite quarter. highs greater the share declines in diesel the increase we XXX recent

improvement that there reports industry marked Looking will a XXXX. be suggest in forward,

adjusted about in growth, markets we infrastructure electric secular group positioned cautious we with However, have ship Overall, accordingly. confident including remain our this long-term delivery, have and mile the last outlook are our vehicles. business we and

enable have future. like and facing team have today, us and in win the ones to We ability operations demonstrated challenging we market brands, will manage a counter conditions the are to we the flexible that industry-leading

the provide EV update I'll our X. progress Blue a Slide the of achieve to and expect Aric have to second product an successful we milestones year key half the Turning in on to launch.

with our As for products from best-in-class in operational lessons quality plans, Ark consider we our these decades the ensuring and and blue of value vehicles are experience learned arc market. Blue we that the are the built manufacturing review

and us the currently gives testing which our field is the in initial with key confidence positive, vehicle's feedback are customer, We a vehicle capability.

the as we delivered by packages the test have in conditions multiple hot excited their they have well on drivers vehicles feedback daily weather are We that as performance from routes. received the

certification and In ahead are suppliers addition, of of our start finalize testing actively final to working component production. provide

and construction We through are training builds conducting operator are slow at our facility of virtual the campus. Mission and completion nearing

the the in procedures and initial are track production for XX delivery completed for operating of units standard the have on We quarter. customers fourth to

building to receive are to services products network out customers BlueArc a We and ensure they fleet highly qualified dealer the committed expect.

of group agreements of of support to support and dealers established plan in We while structure ensure banking small needs. this a talked to relationships service previously a also the service about made and have dealers can network provider. We their nationwide dealer an establishing finalizing process floor up remain

and dealers our finalized, highly engaged to are being level are a arrangements high there interest be product. with customers, While in of continues

incredibly that, prospects year. this ability are quarter second results. our We now second to the execute the I'll With about and half discuss to of launch product team's our turn excited Blue Ark's to in it John over financial

Jon Douyard

second solid adjusted morning, of EBITDA second we you, and everyone. overview in turn and quarter Overall, growth. for X, delivered with our I'll results quarter an line that good Thank year-over-year financial Daryl, to Slide Please our the expectations results were provide with

Specialty pockets second quarter the the particularly $XXX.X Sales our quarter. to We for continue million, see Vehicles company, segment. of across strength X.X% were from down the ago in year

million $X.XX income Net or million net $X.X or previous $X.XX was share per the income in share of compared $X.X year. to per

our Second actions net negatively as adjust taken sales impacted or to million EBITDA our the XXXX. transition In $XX.X income $XX.X structure up by second quarter CEO sales adjusted lower of related the to well of from or was quarter approximately quarter, of volumes. the as X% was given million $X of cost million in expenses second X.X%

EV million, the of include year. program $X.X from results up slightly These spend prior

taking Adjusted was per share net Excluding to through share $X.X segment, you in with year X. points quarter the the cost by pass-through the adjusted up $X.XX $XX.X of with last truck environment. basis XX.X% while sales walk ago solid to now these quarter adjusted than sales, and I'll Services Truck on short-term million our sales in from ago. Vehicles Fleet working included year. mile beginning while quarter, per FVS million compared million growth to delivery second and million a from body EBITDA In Adjusted compared our in FVS body second quarter $X.XX body was meaningful team products. structural aftermarket year-over-year. versus in sales margin output, compared operating chassis capital reduction sales $X.X Adjusted truck improvements and X% for results million, the the revenue. quarter highly and more $X.X Slide of income the year in XX.X% ago, delivered year. a million EPS expenses, X.X% quarter improved to last was actions XXX a declines rose EBITDA dynamic up $XX.X EBITDA of of year million $XXX.X offsetting to in achieved last year-over-year $XXX

the mile demand last to transition address of remains second we the near-term to to ongoing driving improvements half year, team focused FVS operational on the As while softer adjusting support challenges. margin production

for turn the X Vehicle Please Slide to results. quarter Specialty second

and year, We last results have with pleased record margin delivered year-over-year the SD with XX more of driven EBITDA significant achieved team in same million trucks a of to and over year. we were decrease sales quarter through sales from growth million volume milestone $XX.X in our profitability The prior a N-Series XX.X% X.X% performance. sales XXX,XXX partnership than decline. million, was now Overall, last also business an are second delivered million the Isuzu, strong period $XX.X motorhome the $XX.X years. $XX.X as or XX.X% our or compared the Adjusted by

leader to our proven comments, President industry the would of recognize Jacob broad from and his Group like Shift out we to operations experience, close we Jacob the of a benefiting to look SP with the As addition segment. Farmer is Specialty as we forward Vehicles contributions.

markets, broader challenges. XX across Entering were XXXX economic was by our uncertainty outlook to we turn as outlook. Slide regarding cautious Please year, the for key there our our driven

our year versus cost to align team approximately the headcount a XX% on structure cash As continuing reduction. monitored of while By for and was able drive flow. we the a of managed to with generating working to customers capital deliver the result, and demand our June, solid and total focusing start responsibly down the expected end

progress for to the environment we impacted our second motorhome All production. delivery significantly year. materialized canceled and demand chassis. volume for second saw these last factors conditions mile concerns lower prior half and challenging OEM purchases further delivery leading our deterred mile ultimately We surrounding chassis as quarter, deteriorated However, through orders and a expectations last vehicles the

produced we to million of outlook operating these track, sales the to to $XX and $XX be as currently as in Adjusted compared full to in XX be our $X take Given delivered Arc production XXXX, million. to range to EBITDA of is production. $XXX units $XXX million to factors, in million disciplined Blue compared previous billion $X.X on XXXX remains to outlook our changes $XXX outlook the further the previous environment $XX approach million of a notwithstanding year initial to updated billion. the estimate and of the follows: we for million

to expect positive the cash year also flow We drive to continue capital. in we down working drive incremental as

to launch second manage half and a the while continue product We our maintaining growth. protecting responsibly monitor in and Blue long-term focus will business Arc the on

on capital XX. update Slide Please the allocation turn to

able to continues company. a our in And Our balance a for environment, financial be were position sheet improve the to and differentiator we quarter. despite challenging the strength

net Arc For strong, investment The in leverage in improvement as capital quarter, us generated provides in the reduced We're cash million approximately and we ratio reflecting process $XXX including funding flow, of operating expenditures. opportunities, organic we company's the million with prior structure and completed a vehicles. remains $XX.X year second the work significant million a over access growth in capital. to revolver, capital X.Xx which strong Blue $X.X EV and

Arc. Daryl, want to financial minute back XX including of proven accelerate generator. to growth Blue successful of growth years, to SHYFT take coming flow that it in deployed capital, I strength the last million $XXX turning will time, into reiterate largest the months, Over the be the a a the has to investments million cash In being we company. organic have Before $XX

have million shareholders that to addition, period. repurchases through dividends In during and returned share $XX nearly we

cash We we expect to as strength out financial half drive maintain and flow close additional the second year. our

Arc us flexibility we financial in call generate Blue provide for the in maximize story, flow shareholder cash capital value. to back deploy remarks. turn investment. giving I'll We to growth are have returns that strong and will also our are and that, efficiently and solid Overall, coming liquidity positive With our closing years confident on the confident Daryl the

Daryl Adams

turn XX. John. to Slide Please you, Thank

leader long-term strength, conditions have innovation a created markets, financial industrial long shareholder and investment growth we to while have value company Group, focus. drive over a in the to any in market As a focus our positioned we With strategic on nimble maintaining the we remain response and compelling secular be and term. changing growth Shyf

portion continuing their recent and look for my in the to conclude, the thank I'd to company investment Shyf is to with place. acknowledge personally successor like my of interest Group. community call. we Q&A the in the announcement I the operator, transition support ready are the lead and of I Thank now And you. forward for that, Before until

Operator

session. question-and-answer the Instructions]. will We begin [Operator now

The first question BTIG. is from Ray Please go ahead. of Guiso

Ray Guiso

I little for and question. hoping good more guidance. you Thanks dig the Thank morning, to updated my into bit a was everybody. taking

as we you down the step any prepared or about look which kind in of and in kind could the and of revenue the And around talk revenue would terms updated I realize of as step bit were of, in down down? businesses -- about at Just that little of the some that you remarks, there that of any kind talking color customers but kind of in that kind were cancellations? types that the deferrals any is primarily being stepped of where a

Jon Douyard

good this is you Ray, Thank morning, and John.

the both in you I on deferrals at touched think think cancellations order look an some remarks, this of and it from when we saw we and prepared I perspective.

look to we million, down what the say predominantly is There it’s is dynamics midpoint, we’re the at being in seeing production is think within we’ve about went the have when to motorhome some billion would response as materialized dealer from inventories seems in the on I a that million, given you But to I just And there. reduce. noise you about the talked chassis $X.X FBS that really, overall FES, at $XXX historically business. that portion discussed. $XXX we look system so if and there

year. backlog outlook half we’ve been and impacted seen couple able some quarters, a perspective, the second last elevated of they that’s As from chassis match we’ve that sort cancellations so the of the over to had the an really in given haven’t of

dynamics customer reorganizations talked I customers the every cost of talked at about think sort historically that own this these but and of dynamics. about, actions we’re of internally. about customer There sort specific of well. Daryl you has recently are with their seeing We’ve CapEx talked as point, sort some restrictions actions

the to a down, into and of even year. of and we bit as and next early a be that through least there’s end environment so, continue to the the continue year package expect settles And pause volumes at potentially

but again, FES so like, a view And have looks we’ve the of sort taken biggest cautious the in drivers of business. what that been

Ray Guiso

business cost-cutting could And really commentary into Great. of visibility, some from to we some kind of allude has don't of of you of stand your all know for to see Okay. that the to on also kind the way we and margins, the other need been July, moves kind next as rightsizing a are in only But I and of the here customers. to just protect the did we time realizing maybe John, of pretty the period your going where some Or year? this out be? we early about comment, lack of the with

Jon Douyard

I think year, the cautious entered the we I I Yes. -- mean have view. as think a did we

structure We've of some we've like news taken cost the of managing So business actions it's of quarter the year. following first cost we've not that had. immediate late half the the of sort been throughout the

for now, beneficial we a looking flexible we shift to products potentially production as from leverage we're capacity customer always appropriate have to meeting Right manufacturing perspective around different We'll have that's the continue I think getting we're ways so been. and us. in expectations, output. ensure the that be at that And to some

hourly And perspective. there as we an will times from to so as that there's we'll are when well certainly do flex to the those continue no volume, things extent

won't of we like So monitor this. were to but look ahead this ahead feel gotten at and it feel that like we going Not a we continue say of we to we've bit forward, at look

Ray Guiso

good my taking the for Thanks of Have hear. to a rest question. Good day. Okay.

Operator

Davidson. ahead. is question Shlisky of from go next D.A. Please Mike The

Mike Shlisky

about maybe possibly morning, weakness that a taking customers sector-wide now? in The that Good right e-commerce causing that are been the or you've is talking is one my question. Or thing? thanks just world, it for and Hi. that X

Jon Douyard

dealer would out question, your there's the there. of dynamics -- mean, I are I I missed the But certainly that specific inventories. the mean, think elevated I each there's say look at them. are think themes first of a each of the -- across large I I customers -- part parcel consistent with only but handful

if things of both and parcel But really are from and to at package to look Pat, those now, adds specific point certainly, pause reorganizations -- year-over-year attributable I think, companies think declines of sort and of the reporting right company. any you that the from up what a we're one in I that's out a perspective, of of all purchase seeing environment. types the

with It's just have in expectations to in our term discussions right? short I need remarks, Daryl his the vehicles. of made long for continue they're earlier customers, fleets over They the their positive CapEx the there's balancing with us continue comment how to think that sort term. tell managing a we

we to that, pushed but out year so later of a we -- those expect here come it's bit that and want cautious over demand be we think together And potentially? little could again, activity the couple perspective, be -- point, to expect from there somewhat the some we quarters. But probably next at a some in

Mike Shlisky

you Can -- to mile going Okay. a for the caught edge has prior just day net that just they still third-party white have is customers? some delivery demand? day levels? age the comment outside on larger they Or up every van and providers fleet trust every your to meet final Are to of to should

Daryl Adams

a lot light trucks office. to those we now our now trucks right on we but about -- Yes, can Mike, fleet give previous think to this is I are office on a those delivery I'm white trucks, Daryl. They parcel white mentioned exact question gone. you and next here calls, Depot your number of the closer sure have not company, an age, had we've

vehicles. the down needed to gone. COVID they I post vans think because the hoses volumes and -- got those their commentary, were going John's couldn't my vehicles, get So They point right, package in

it's figure environment, a conversations. customers -- exactly it's out. trying the we're that with right and right them what's formula. to trying The dynamic figure having So out are to And

manufacturing point is to to ready and right? is to some take at sure the fleet doing that's and we're more comes in this that comes, is age doing. now, to processes different to the division make and place back efficient take what company good going The it FBS that ready making up sure when the we're orders And is the back the point volume that's we're what replacement on time opportunity flex put once So cycle. keep Any and be coming. right they're those and that's our what will

Mike Shlisky

Maybe -- last Blue Great. this one to -- be still in Okay. year kind guess to who on really saying, you I still appreciated. your have hit a detail in one. certain Arc does just run outlook for little cetera, of Is had the more a mentioned XXXX XXXX been be you -- also that testing in what appear line in relatedly, they've rate line? appear people vehicles, BlueArc been would And et be

Jon Douyard

Yes.

made I the and a think comments TV Dan update.

field I vehicle the as team continue progress broader well. those to the really forward. in field fee as customers the there, customer has with well of going -- think testing very has demos drivers made been that from so the pleased we're now we'll and The with we've feedback and fantastic execute the we've performed tests types and been

to to get we as a which into next we'll that think will production XXXX. where get look up you our as is ramp we for X,XXX are at capacity into standpoint, I have as expectation continue we from year,

expectations so and move we'll forward. And delivery we an acceleration of certainly, see production as

Q –Mike Shlisky

the it guys. Thanks I'll there. for leave Okay. time

Operator

Roth from MKM. Matt Next question of Koranda is

Matt Koranda

it adjusted about at relates And about we FES. over the coming revenue As We EBITDA. and cut much talked how million already maybe just is $XX of the it moving to out similar to guidance, midpoint, from is just is dynamic finer maybe to taken a this to year actions cost? much how FBS coming and then that to were cut put to a speak and tent

Daryl Adams

Yes.

of about. primarily towards that look the as of heavily the a and to XX, about headcount it's as you managing flex at half, the talked talked in I FES think the necessary which first look programs. the taken, When think to we to we've discretionary business, through some related it, reduction as we've XX% half but second continue I cost more actions year, volume will weighted roughly manage we've decline, you at also the adjust been

to confident are here is BlueArc us future. for as we protect return key that think in I the in the investment what will

manage whether it's And investments so the been marketing, in through other functions. go able we've to IT, from

as And consolidation to so facility biggest or those second those we are items been anything look year, hasn't X but the actions. are that. pieces. And the into key necessarily we'll like the the There of any half continue at get other

one, footprint the transferring about think doing thing the we have by capacity the to earlier leverage which I as additional and I we facility are that looking that well. is products, talked

Matt Koranda

sense. Makes it. Got

SP firing how off margins would should down at all? margins EBITDA I half Just back here cadence for the FPS from a the here a guess, come about be to color in helpful. year of both FPS we the margins So improve little that, of bit more and think bit

Daryl Adams

would I profile, I of half mean you quarterly year balanced. the as sort think second the expect to of would relatively be I the Yes. about expect,

FES see in I continues they by I think say perspective, productivity second that in we're you And record a step to the that pressures have it the SP would of from are the look we drive. probably you volume of year, the the where to with off operate offset looking their a at quarter. half in highs down when margin some actions

Matt Koranda

more just one Maybe me. helpful. for That's it. Got

seen do worst any quarters? it deferrals do XQ. in of cancellations On I the volumes. But and when expect the bit a cancellations kind in of next few know demand more backlog, of little you think on about we into dependent sight we line Or we've improves? the talked package

Daryl Adams

a perspective, probably probably I second from troughed quarter. think the in think past we're cancellation I here

to may comfort well, when in at the of half does I think second happen demand package longer one a that see need inventory, in as year. being what I or the be some to turn comes the of couple look variables, here which and you when a volume we there's start back, think think to there I needs

Daryl's continue think the I discussions that point I have with good back to for we to vehicles. need comments about customers

there's a outlook the solid of or timing the impacting the that's second a so, continues bit pause be our to perspective. of year. shift half But And from very a here

through in do And manner second and an and it that half business production so will efficient be continue to the to back. manage return ready to comes the when

Matt Koranda

Makes sense. me Thanks. all it. Got That's from guys.

Operator

The next question is James. Raymond from of Claus

Unidentified Analyst

Hey, good FVS to is us a you everybody. I parcel morning, if customers? on rough rough today number bogey was a for or have tied wondering the what percent backlog of not

Jon Douyard

that We has what I in would say that. quarters. into is for balanced don't can last you. precise the probably certainly number a look it than more it of been have have I balanced shift But particularly mid-mile than it business has I'd away body the sort we that a truck so from been with seen the historically. what growth in of more say parcel, shift, couple

Unidentified Analyst

Okay.

us those looking the was number maybe of EV a in better. Okay. X you that the whether sort when bit just what's talk that difference? day, for, milestones higher. things. And you that's I But testing then and partnerships, orders, maybe that And one, could help Arc should dynamics you to kind hard did the be little if of XX XQ, then driving more think number with Blue customers, what's to I'm I'm going wondering about vehicles out next investors Can understand circle dealer

Daryl Adams

Yes. Sure. Daryl. It's

be we have when the but end probably the out those be if will release so then vehicle of the the not see after builds. sure not, and And we'll dealer first virtual to provider getting a and vehicles or complete the line press agreements going roll of then you're the it'll milestones off operators in we next training service the agreement. some the think I

going was we number to with went so but I was their longer. summer. the suppliers the winter wasn't think in component, higher. on brake one a of bit a to and did what brake I both They And we current past, to had testing the initially go have about it the talked remember supplier that little So, exactly we don't form, in needed

of other doing The testing. battery only one was X

a So certification, get little and bit that now. pushed certify out with they so the it testing, they brake they in that's internally, a to done they're their once process and need it

we that the do the what vehicle. So, we without a vehicles to certifications safe get there is sure all it's out want make don't to having need

and us battery that went So behind there that way now. was of testing the was that's on, all little bit a but main some

So, and want we ready that. is we're the to any customer, sure of just go not to for jeopardize safe vehicle the make to going and

Unidentified Analyst

Okay.

don't you So, think demand-driven a thing? it's

Daryl Adams

No.

Unidentified Analyst

the think And implied Okay. about the FBS compare I XXXX of margin I in FBS and I on how P&L, levels appreciate there's we should understand seemingly that. context differentials you maybe if R&D to Blue heightened margins the just my last a could, curious revenue of half maybe into in what of do? back with was you John, just one. XXXX spend XXXX associated you for today in then Arc, did can we and overall 'XX versus corporate the similar that used base. but maybe all the some year talk about guys in

Jon Douyard

think second pretty think than to where higher close significantly an where We from half looks the second Yes. we mentioned, when you margins the standpoint. FBS I I When are what delivery year high. units of look at up quarter certainly, the delivered were vehicles I I like and mean as parcel volumes looked were today.

it, that that But a some issues as just offset that. volume a capacity, to been from year the shift looking I we plagued of And get as go at experience. is more the and it's from part to important mentioned, cost think material I mix think as I perspective also I But of well. of there's to parcel, over of a inefficiencies absorption continue, a inefficiencies at some to look some note related the some aspect that fill out body back think continue and have that perspective. of for we're of that you more vehicles, business we us the to after challenge you which that I it's have created versus think bit those truck work that if towards of are look there of

there's still of that and working And an points later we the into into we so, have margin the a perspective is in that operational team from just get couple headwinds of year us XXXX. get through as to

we I'd issues of to it expect. year that, by that so, creates the and move expansion the I some that manage as forward. offset think leverage leverage we productivity challenges continue margin improvements through expect creates that with half further or But volume we'll the second And some the of

Unidentified Analyst

the appreciate time morning. this I it. Got

Operator

of The from ahead. Capital Ryan Sigdahl next Craig-Hallum Please go question is Group.

Ryan Sigdahl

Good Steve curious market morning. guys chassis current commented and dynamics FES on dynamics? Dyer. any guys around I’m on Ryan the are on Shyft horsepower the you moving on you SCB share where high there the share given for seeing

Daryl Adams

Hi, and deterioration. because in -- see data. average, ones Ryan. don't It's we No, depends one And is past, Morgan. isn't it's I FBS It's it's of year-over-year on -- Daryl. the think the is any X there it's we've times all really good mentioned it suppliers, But orders. self-reporting. This harder multiple us any on right,

last from be different a it one would maybe So had get we order this customer year. year, that they

I during And it's overall, part So going down. delivery seeing it not in -- around. you that parcel the commentary going now on all that deterioration, challenge that's parcel delivery market does think mentioned company call. my of of move volumes any right with the a But wide I read

Jon Douyard

that, to to of a the than add chassis I an reaction to year, of a as the at company share production it if just cutting or issue? more of the you think manufacturer OEM challenge market second Ryan, that points for I think I -- being specific half think look industry And

Ryan Sigdahl

price any the in pause future then is cause kind to price secondly, to customers where changes, here? negotiations, I made are trying And of within backlog the your press reductions or guess, scale which them causing for just and

Jon Douyard

when challenging Nothing ago. perspective. that moving certainly environment to from forward impacting I a specific XX than ordering out nothing But from would we perspective, say that's where an months pricing sat point more

Ryan Sigdahl

Last one for me.

normalize you the dealer how dealer will direct it business, each? is channel of mix how of reminding to And inventory? inventory Just versus long much do a then take think kind in

Jon Douyard

call balanced customer mean side Yes. point, and the our of I dealer little every from is perspective, but bit on it, the relatively lumpy business business. direct a SCS between it's a it, I'll

way we in I into or as the second we that clear and would other. it's to ahead of year. ourselves next don't some that it's to We one want year, of the tilted expect turn Sometimes through get the get here of around think see going half to just assume

the it so here X maybe to softer X X expect next mid-next through quarters, or year. be at And environment through even we least quarters, a

Again, to that. conversations having back monitor they So we'll continue vehicles. the customers is we're I'd point that with need to

so that's and at some demand. And point, going see break increased we'll to an

of we're think in period I just pause. a

Ryan Sigdahl

it. guys. Thanks, you. Thank Appreciate

Jon Douyard

Ryan. Thanks,

Operator

I the closing for question-and-answer would to our Wilson concludes session. remarks. like turn Randy back This conference to over

Randy Wilson

Service participating you please and Industrials the Raymond like XXnd I'd to for Davidson interest September to D.A. thank the and Thank your Industrials in Diversified virtually held Group. Conference Annual Nashville. that, at thank Shyft We Day Global Las We And Vehicle investors you. in the call. all for call. today's disconnect James in with forward The look operator, RBC the hosting Vegas. in conference in Conference investors Technology

The Shyft Group, Inc. (SHYF) 28 Jul 232023 Q2 Earnings call transcript