SHYF - Earnings call 3 2023 | The Shyft Group, Inc.

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Operator

Good morning, and welcome to the Shyft Group's Third Quarter 2023 Conference Call and Webcast. [Operator Instructions].

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

Randy Wilson

joining call. for this you morning's Thank

Chief As issued appointment a have already Adams Chief our announced Executive President Chief of Dunn; Daryl will morning, we Jon plan. On seen part Officer; leadership Daryl Adams, Financial of joined this and next Douyard, call, press John I'm Group's Dunn the you by Officer. as as He Officer. succeed may outgoing effective John transition Shyft Executive today release announcing previously today's President and and the

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

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

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

We review the and will on updated before update our outlook. of XXXX results more a provide a to business detailed moving

turn then will to to We for it remarks. today's X, line open turn will prepared Jon and I'll the lead Slide who Q&A. Please over Douyard

Jonathan Douyard

execution long-term the as cash perform in and focused record driving expectations line our Overall, Specialty well XXXX profitability morning leading delivered Vehicles. generating quarter Good with review continued to commercial remain another our enable third was and thank infrastructure-related on company. investment of you our to businesses team results. in to performance us We third quarter vocational operational flow in for well, our joining quarter and to that as as

in million, the in million Blue third and the electric invested $X.X cash delivered of repurchased quarter, vehicle $XX.X operating shares. program For Arc solid flow company the

communities progress highlighting annual our key good continue our make were In summary, macro we've benefit social and committed driving challenging execution pleased a we strategic and release members, report, addition to third to environmental, sustainability to environment. and made governance in we to the other on initiatives, quarter second are we on team improved stakeholders. In progress initiatives highlights, financial to our

our X. for key last-mile Slide The markets market commentary end to and strong. Turning infrastructure on fundamentals our long-term delivery remain

the to these third some the out be auto able mixed we well that including As chassis the recent higher as fluid, strike across to July dealer last-mile items, we on activity. Throughout quarter, the market. items, levels both the clarity OEM uncertainty gain continue laid reports initiatives strategy in production in call, parcel driven limited were continue fleet have markets by September our but to and inventory and workers drive delivery in order that including volume earnings depth motorhome cuts, started of as additional

Fortunately, our the infrastructure-related products the to those truck demand date. continue has of impact strike minimal businesses to see been and strong on

focusing ensure stay close execution appropriately, both and operationally. we customers to monitor commercially respond continue on while to drivers market We to and our

Rush largest network by daily perspective, daily of an to in a process our provide our easily rigor exceeded feedback Arc completed network customer's discussed the performance we earnings Enterprises, subsequently expectations Blue will Arc and commercial further that out made our field demanded update operator production commercial parcel positive. milestones America. on that by dealer North key that the that a will EV overwhelmingly Turning I The the was test relate last We a vehicle call, the us test, our dealer vehicle needs, meet progress to met the customers. From confidence Arc and we Blue and Slide X. our On readiness in was customer. dealer large Blue on giving network. adding vehicle product, program the with and building

expands geographic will the Rush In of fall Marion, of XXXX, in addition dealer and Randy Arc announced be reach we the a Blue the our brand. to fantastic representative

the issues a we key communicated related experienced increase quarter, batteries earlier in from production quality an to As supplier. in we

been Our customers needs. will goal is high-quality into unfortunately, have and daily to always to battery that And delay their customer issues, deliveries we has XXXX. meet provide products due to these had

impacted despite the per pressures from $X.X million, year was vehicle We supplier margin our third the share issues. to market these $X.XX per compared income high, to Net delivered ago share interest incredibly our Blue continue quarter We we of Arc income work to with $X.XX year. or in about X, or and the that were for an are Sales overview expectations million and Slide earnings performance. third remains with XXXX line I'll financial customer $XXX.X electric net of resolve that down quarter. results. Overall, to program. Please our in XX.X% turn and facing $XX.X excited our sales year-over-year provide the million previous were quarter

Third credits. third of R&D with program million, results million the the quarter adjustments or include These year. sales, from X.X% down quarter, includes $XX.X consistent benefit of $X quarter third of of XXXX. tax In by for income EBITDA the XXXX adjusted a tax favorable million, spend X.X% $X.X prior EV sales driven in net million of $XX or primarily was

in year. year EBITDA sales $X and quarter van. aftermarket with year $XXX.X down a partially was quarter a in walk-in sales, offsetting to million EBITDA quarter, In EBITDA $XXX.X year $X.XX per to XX.X% Slide was $X.XX compared was income our the X.X% by strong million year. I'll to share per adjusted third while sales for compared and you Vehicles through softness ago, truck quarter compared to million of third million the now EPS Services X.X% in ago. Adjusted quarter, of $XX.X margin segment million, body ago expenses, $X.X Adjusted of versus decreased XX.X% last share the achieved sales. Adjusted was Fleet on from million net X. results $XX.X adjusted walk last these the operating Excluding

Turning to Vehicles. Specialty

quarter another Our delivered performance. team record margin great with

overall outlook that quarter saw we broader market historical XX.X% expect was uncertainty was the have a to regarding we FVS experience demand. third to driven motorhome remained And XX.X% market headwinds. our same orders, in cautious decrease quarter, remain across driven as continue slower Slide X Third of conditions. by sales million the while the turn EBITDA our outlook. Entering key for to $XX.X Throughout year, sales period by or $XX.X uptick a in quarter, were sales there levels. lower to million our we compared in sequential $XXX.X in markets versus year. Please last million Adjusted the we of XXXX uncertainty year million, given demand from economic XX% or prior the $XX

severity OEM chassis of the products, key We OEM also visibility gained the and supply auto workers strike parcel further reduced for began. to

us has While minimal created industry. the uncertainty date, the strike it has has across been for to been -- impact

Given notwithstanding to our XXXX to the be we EBITDA these as in the $XXX follows: $XXX factors, million; have to range in further adjusted million sales narrowed changes of of outlook, $XX million. million operating environment $XX

Slide and we us quarter, we significant fourth aggressively reductions cash cost additional provides the given capital cash advantage. a the additional balance operating we generated competitive company's a sheet million In year. Please working reflecting revolver, The flow solid out close capital in flow, in positive allocation net to expect capital. over business the year. Shyft's XX. remains current year the as to actions we'll $XXX third $X.X the the continue remains take turn environment and which capital the approximately for quarter, million update and the on to strong, operating leverage manage and ratio improvement structure of with a prior Xx We access

$XX.X expansion SV and and maintain active growth. healthy business. We fund We Arc growth the our M&A remain to on company organic Blue an we cultivating in focused believe in continue In to the million of attractive primarily pipeline as we represents initiatives quarter, shares value. opportunities a accelerate EV repurchased market

robust now fundamentals. have The remaining XXXX, in market Group our million shares authorization. Please $XX.X growth turn story with share on compelling repurchase long-term We Slide repurchased a to $XXX leaving is XX. industrial Shyft of million

in We are we balance our on and across driving strategy, execution our the of are focused the long-term confident strength sheet, business.

on Dunn members, the during Shyft opportunity would leadership Motors remarks, Daryl and team to all I take with management team his thank Daryl and partnership call John his our of Before closing and Spartan turning to over the like Group. the vision, Shyft to for tenure the behalf for and

here different and With a not Daryl. in the I'm stronger great (sic) was turn move today much I He his he we as because is While to foundation left leadership. confident looks when that, the of for XXXX will saying ] us forward. in started, I has company call XXXX that [

Daryl Adams

Jon. Thanks,

leadership down the my Before moment like leadership in to we successor. we this transition in year conclude news Earlier announced following a of a from as address I'd this morning. CEO briefly June, I which to we take and the will appointment a step President announced plan call, role today's

years. in our team and markets the transform last-mile lead Shyft delivery done Shyft the our search last served the of which has previously an candidates, Following end It's industrial Vehicle the effective as a process Fleet comprehensive CEO for me have incredible for of attractive I John proud privilege leader Board Shyft's of a business. Dunn X team into considered as to external and appointment we internal in announced work today. John the to and am and been next Services President infrastructure.

As strong positioned closely and I seamless look of ahead, is work prospects, ensure to I'm I brands, a well a with roster Shyft John confident will innovative growing with transition.

your product our now are and the professionally transformation it Shyft confident for next enjoyed with Dunn time familiarity over phase interest and to and the investment with the some company, personally. growth. remarks. to support and hand of thank his with getting And and to I manufacturing, in of John's along person we I'll the of John analysts thoroughly development, all spending through you John significant you Given operations is to leadership lead for the community know and company. you right

John Dunn

selected excited In honored need and its our Shyft our next Daryl. products, team in for me the continually great fast-paced recognize that industry, I to the I'm lead members role. of Board you, I'm Thank organization this and With growth. for perform. chapter the adapt customers, to

and customer increased We quality through product grow and excellence, an commercial operational focus. innovation, will

share call. and more now shareholder committed business that, for are regarding of deploying We the and to operator, company's Q&A details with my we efficiently you. ready Thank priorities portion And XXXX, will by strategic we the capital. In value the direction. allocating early delivering are resources

Operator

[Operator Instructions] of The Koranda question from first Matt is ROTH Capital.

Matt Koranda

John and of to luck Daryl. best to Congrats

body the this just wondering I'm Just morning. if the dig order flow It that first implied up maybe ticking could several look like you does into quarters. FVS for wanted it's you in to reported time truck maybe walk-in in the current versus for that's in demand specifically break down that mix driving just flow some of flow order the the order you're factors van and observing? quarter, like the

Jonathan Douyard

we Yes. Yes, orders. an think saw the I definitely -- in uptick

you lumpy know, our historically perspective. I orders think an from is as business

one point So I see a trend wouldn't it's necessarily, there. call progress positive but some to

as see side upfit to the of of activity side of continue well. the We the the well as some truck as on body business business

van quarter, at a FVS business. under have the attack number to leader of here to I the social look new talked of continue to continues production think seen the we've slow in media, to within we've about. But which which our and ways I some We of sales you brought market. may actions a that internally different some leadership leads in taken be cuts John's think walk-in the also

progress. good call And point. we're sit think this it here so again, going I trend and at a But to not

Matt Koranda

what's just the fact And order Okay. customers any getting maybe with seem have mean, I just it it's to shown translated trials indications? success I Obviously, cover can yet. Fair Arc, the are guess, What's Is the then it but that have that back? modeling you're that thoughts Blue one, talk order that won't put you battery in you issue, in flow on indicating you holding doesn't like enough. multiyear some we essentially ride Blue last the we guys maybe and a you be in for year start about production 'XX. event? ramping of the Any production if until context targets mean you should also around Arc when the in additional drive ramp-up and 'XX the XXXX? And then out production and could ramps

Jonathan Douyard

customers. interact there's about other that battery the that No, a or at gating lot clearly there's demand customer certainly a the We whether the with mean point. parcel There's But a level interest, -- talk to dealers, the clearly are Yes. do item there and think of local some demand, I to I up interest. to this solid high demand that's of this issues Randy that it's a out continue Canadian we've have Marion signed Rush point, customers question.

to issue we that through let continues so perspective. we and demand, production battery from but move to a be get that go there obviously forward And need before

the because we through we as XXXX it. related that when look into the supplier announced put a we to -- didn't September on it we in push issue, So continue delay or to work date out

And continue risk driving other focused so mitigate that, to on as the well. team's alternative opportunities to or we closure that very at look to and an

perspective, and to demand beyond, being this point. But standpoint able XXXX So out think I I is make in to address I at probably would little production the year early it's from react is curve think tough and we to XXXX, a the and from model, or continue -- profile. -- but point a not long-term guess, progress to probably there I production as wouldn't a it you look the

XXXX we'll continue as we've view and this a feedback confident provide issue from to received a so the very But confident we again, that short-term on feel And still updates issue. in that. so product the And customers. in the we're as and than to you numbers, pretty we more longer-term

Matt Koranda

it is Okay. sourced with going issue to is existing Jon, currently battery the the have going clarify, from? that to be supplier change? supplier fix to And you just a a the to maybe be fix Or

Jonathan Douyard

having mean, I Class on to past supplier battery as right? on I end at of make ONE Our the options talked X, battery have We've that We've battery sure we suppliers. the all day, we company Next announced Well, want X. Energy Class the in about open, the think our the multiple

to we get look continue also to so but current with resolution the issue. And at we're trying our options, supplier engaged to and

And not myopic here. resolve certainly so problem to we're the how or we're in trying mitigate

Matt Koranda

the But Arc bit more running? agreement to leave Okay. for you I'll then detail into that taking up units just that actually it just on just the with additional that they're little any for how just and then order once on Are Got others. color Rush, more Or production maybe essentially Blue announced sort And they going of custom it. one works. and me, product to get will sell on you how to be function that is inventory? flow? Maybe some agreeing a

Jonathan Douyard

Yes.

both. -- the combination think a it think I I will be of

the great footprint a really that be all they've got there'll -- a think I fantastic and covers of country service network.

them anticipate from production. some well support would perspective. stocking once solid get of we from have we'll that So level we as But into

talked financing types I working ] think both we've in we're on the with [ the and those of past about arrangements how things. dealers

that expect And end dealership their where but well. commercial sort in one-off going so there's orders that we be of environment, would opportunities for normal it to we leveraging network there's to as up operate

Operator

Greg Lewis next The is from of question BTIG.

Gregory Lewis

congrats, and on you for I'll circuit. everything, thanks Daryl, maybe see the

way there as visibility is is. of parcel they way Is revenues, any the And challenged, to that think get to -- QX, realizing color like it Jon, we guidance really, down the change, any QX? for there more is do kind be implied and I'm be but So Like try of it that out hoping I nail was any the going is low about kind margins? kind some what kind around more of to as to kind of color end? end around is of high to

Jonathan Douyard

out came think in I had range. July, mean, a when we I obviously pretty wide Yes. we

some have a look thankfully quarter, -- dynamics factors, including made talked of -- lot seems that night. at the the think overall of But supply in terms strike, I environment, of last which variables. think I about made as to progress we there's some demand the the we and of the chassis some and

a we've impact, remarks end continue -- point. I closer as standpoint. prepared a of I perspective, mentioned from this from the the pretty at to the we So volume visibility year that think got be aggressive to good we cost the in

volumes while significantly managing And to sort the year-over-year. business continuing so drive efficiency lower in we're of

So a pushing certainly as around side from probably the the commercial more well. perspective variability we're cost and is

Gregory Lewis

to And going thinking you're thinking then Was the this kind that? but kind little as going about to for just color How we're of want we're And QX, share maybe the do. how outlook kind of about continual opportunistic? we're is Great. that around about just bit stock is? of just kind not repurchases. something any to Okay. maybe given I it's to be thoughts here, a did continue look of here, the the buyback like where more given Or broad

Jonathan Douyard

Yes. we've fantastic I fortunately, despite from mean got of some the challenging We've got balance think, that environment. flexibility I market sheet perspective. a

that and of perspective. we're adapt from And so to be flexible sort able

in think long-term year. close value to we prospects million We We the like there's $XX I bought in this certainly company. the of shares stock today. feel the

I be a out also authorization that's we to allocation think don't got as the forward, we've as that think capital I company. there, a but significant want we doing move we're that have only

think I inorganic organic to growth to over and investments time. accelerate be here like we'd able with

that years. think And us continue in at beyond that the we've over shares so an look the dilution were we repurchase of and balance last as to done to was that And above for sort opportunity the annual couple of it we'll quarter, it. I

So at for a opportunity. us, balance We'll as where strength given continue our sheet good that is. lever look to

Operator

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

Michael Shlisky

everything. thank you for your these partnership course, Daryl, years. all I of over really appreciate

Daryl Adams

Thanks, Mike.

Michael Shlisky

-- just yes. you Jon,

coming truck [ supply compared had to any strike. after than we ] the for plant do it here about was guess the your better will briefly look John, just And the feel passing like in of Kentucky on especially I has Kentucky materially prospects overnight. So on does that near-term before? whether strike Ford answer, essentially it last resolved better get your you in touched regarding out strike feel today have yesterday, but you you do

Jonathan Douyard

I think I has date Yes. relatively we minimal. been to that have the mean seen impact

XXXX I think would end really have we some risks. the closer is the where got seen of and into we as to year

And certainly so more may end of be we it impact hadn't to itself the this feel of was and as in or an There's we the some the XXXX. we year, minor to resolves narrowing confident the we really extent that the next seen the the or guidance days, risk into of timing date, certainly weeks of that anyway. took enter but

Michael Shlisky

Shyft foreseen there Are the costs as that Got going also the incur on Or on issues going battery supplier? that the to what's thanks wanted to it. hadn't to are that I going the on, you touch to will well. by costs any have that issue are be borne supplier? Group strictly to with fix

Jonathan Douyard

Yes.

I avenues terms I of we I to potential internally is costs look bit in a carried then inefficiency think of some at on from it as which think largely mean, a fixing there's perspective. we in continue obviously the that, other have the And from supplier. supplier. of this perspective. that by could a there distraction supply, incremental supporting But really lies issue, -- be cost

Michael Shlisky

one guess, the segment's have to on I anything EBITDA. decline have maybe is can And business challenged improve group to RV last RV the in it. the generally to flat a me. business And get despite, for was margins that in you're in EBITDA is on relatively no And working and that I'm do as you RV there down that large fix is the curious, change one just SV EBITDA And prior over the the that business being year. the

Jonathan Douyard

declines a Yes. business, and the terms there motorhome certainly the think is you still We margins I of some pressure certainly in up in volume but that you're some. at business just tied that have fixed on have ton look of to as don't going think Well, business, absorption. we've I seen, that cost with

for the I And think, market so business structured we've, appropriately that is today. where

when you perform rest think look continues I it business, the well. at of the to

team in managing continue the drive but These through We've drive is operations before is increase opportunities the a same creating helping Nashville. doing the supply gain also managing top to We to footprint. gain for all push some capacity about continued the and are which line, we've share talked margins. leverage, much top to chain, us job expansion to line, fantastic pretty

we business. so, And that like

perform businesses that I think portfolio, well. I the that We there. space, to service infrastructure-related think continue body have we in invest and continue like we'll really to that

Operator

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

Randy Wilson

in Baird and the to you, Industrial look we And at Florida. Group. Industrials and please thank in UBS Conference Thank the that, with the forward disconnect Summit Annual We interest Shyft call. for the you investors hosting operator, Chicago everyone, in Global your

Operator

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

now may You disconnect.

The Shyft Group, Inc. (SHYF) 26 Oct 232023 Q3 Earnings call transcript