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The Shyft (SHYF) - 2022 Q3 - Earnings Call Transcript
SHYFThe Shyft (SHYF)2022-10-28 00:30
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Financial Data and Key Metrics Changes - Revenue for Q3 2022 was 286.1million,up4.9286.1 million, up 4.9% year-over-year and up 23.2% sequentially [14] - Net income from continuing operations was 17.3 million compared to 21millionayearago[14]−Adjustednetincomewas21 million a year ago [14] - Adjusted net income was 18.6 million compared with 22.9millionintheprioryear[14]−Dilutedearningspersharefromcontinuingoperationswas22.9 million in the prior year [14] - Diluted earnings per share from continuing operations was 0.49, down from 0.58inQ32021[14]−AdjustedEBITDAwas0.58 in Q3 2021 [14] - Adjusted EBITDA was 27.1 million, down from 33.7millioninthepreviousyear,withamargindeclineto9.533.7 million in the previous year, with a margin decline to 9.5% from 12.4% [14] Business Line Data and Key Metrics Changes - Fleet Vehicle and Services (FBS) revenue was 184.5 million, down from 191.4millionayearago,withadjustedEBITDAof191.4 million a year ago, with adjusted EBITDA of 24.4 million compared to 36.4million[15]−SpecialtyVehicles(SV)achievedrecordrevenueof36.4 million [15] - Specialty Vehicles (SV) achieved record revenue of 103.9 million, an increase of 27.9% year-over-year, with adjusted EBITDA of 15.6million,up730basispoints[16]MarketDataandKeyMetricsChanges−Backlogwas15.6 million, up 730 basis points [16] Market Data and Key Metrics Changes - Backlog was 1 billion, up 22% year-over-year but down sequentially as production improved [6] - FBS backlog was 915million,up22915 million, up 22% year-over-year [15] - SV backlog increased by 25% year-over-year to 129 million [16] Company Strategy and Development Direction - The company is focused on executing its growth strategy, particularly in the electric vehicle (EV) market with the Blue Arc brand [10][19] - Continued investment in technology, capacity, and talent is emphasized for long-term sustainability [19] - The company aims to maintain pricing discipline while addressing supply chain challenges [5][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand in end markets, citing a robust backlog and improved chassis availability [6][14] - The company expects a recovery in cash flow performance in Q4 as delivery of finished vehicles improves [18] - Management remains cautious about supply chain challenges but is confident in the ability to meet customer needs [5][26] Other Important Information - The company reported EV spending of 7.7 million in Q3 2022 [14] - A sustainability report was released, highlighting efforts to reduce environmental impact [12] Q&A Session Summary Question: Discussions around ICE and EV vehicles - Management noted that discussions with customers are primarily focused on internal combustion engine (ICE) vehicles, with expectations for increased EV activity once products are in customers' hands [21][22] Question: EV specific costs for next year - Management indicated a step down in EV specific costs to a range of 10 million to 15millionforthefollowingyear[23][24]Question:Chassisavailabilityandfutureexpectations−Managementexpressedcautiousoptimismaboutcontinuedimprovementinchassisavailability,althoughtheydonotconsiderthesupplychainissuesfullyresolved[25][26]Question:Fourthquarterrevenueoutlook−ManagementexpectsasignificantrevenueincreaseinQ4,drivenbyimprovedchassisflowsandUSPSvolume[27][28]Question:Workingcapitalandcashflowexpectations−Managementanticipatesareversalinworkingcapitalprimarilyfromconvertingfinishedvehiclesawaitingcomponentsintocash[28][30]Question:Orderflowandbacklogconstraints−Managementacknowledgedthatleadtimesareaconstraintonorderflowbutremainsconfidentindemandfor2023[33][34]Question:Outlookforthemotorhomebusiness−Managementisconfidentinthemotorhomebusinessdespitepotentialdownturnsinsmallercategories,citingrecordrevenueinQ3[40]Question:USPStruckbodycontractandpass−throughrevenue−Managementconfirmeda15 million for the following year [23][24] Question: Chassis availability and future expectations - Management expressed cautious optimism about continued improvement in chassis availability, although they do not consider the supply chain issues fully resolved [25][26] Question: Fourth quarter revenue outlook - Management expects a significant revenue increase in Q4, driven by improved chassis flows and USPS volume [27][28] Question: Working capital and cash flow expectations - Management anticipates a reversal in working capital primarily from converting finished vehicles awaiting components into cash [28][30] Question: Order flow and backlog constraints - Management acknowledged that lead times are a constraint on order flow but remains confident in demand for 2023 [33][34] Question: Outlook for the motorhome business - Management is confident in the motorhome business despite potential downturns in smaller categories, citing record revenue in Q3 [40] Question: USPS truck body contract and pass-through revenue - Management confirmed a 40 million contract for USPS, with some pass-through revenue expected in Q4 and into 2023 [44] Question: Specialty vehicle margins - Management indicated strong margins in specialty vehicles but cautioned against modeling them at 15% on a long-term basis [45] Question: Fleet vehicle mix and pricing - Management noted favorable pricing and mix within the fleet vehicle segment, with some headwinds from product mix [46]