Shyft Group Inc Q3 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matt Koranda - ROTH MKM Partners, LLC - Analyst : Hi guys, good morning and congrats to John and best of luck to Daryl. Just wanted to maybe dig into the FBS implied order flow that you reported this morning. It does look like it's ticking up for the first time in several quarters. I just wondered if you could maybe break down some of the factors that's driving demand in the quarter specifically order flow like for truck body versus walk-in van and just the mix in the current order flow that you're observing.

Question: Matt Koranda - ROTH MKM Partners, LLC - Analyst : Okay, fair enough. And then just on Blue Arc. I mean, maybe can we cover one, I guess, are you getting any order indication -- obviously, you're indicating that the trials with customers have shown some success, but it doesn't seem like it has translated to order flow yet. What's holding it back? Is that just essentially the fact that you have the battery issue, and you won't be ramping production until 2024? And then maybe also, if you could talk about the production ramp in '24. Any additional thoughts on when we should start modeling a ramp up in production in '24 for Blue Arc? And what does that mean in the context of the multi-year targets you guys put out last year around the ride and drive event?

Question: Matt Koranda - ROTH MKM Partners, LLC - Analyst : Okay. And then just to clarify, John, maybe, is the fix to the battery issue going to be a supplier change or is it going to be a fix with the existing supplier that you currently source from?

Question: Matt Koranda - ROTH MKM Partners, LLC - Analyst : Okay. Got it. And then just one more on Blue Arc from me and then I'll leave it to others. But the agreement that you announced with Rush, maybe just a little bit more detail on how that works. Are they going to actually be taking any units into inventory or is that essentially just they're going to sell the product for customer order flow? Maybe just some additional color on how that will function once you get production up and running. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 26, 2023 / 12:30PM, SHYF.OQ - Q3 2023 Shyft Group Inc Earnings Call

Question: Matt Koranda - ROTH MKM Partners, LLC - Analyst : Okay. I appreciate it.

Question: Greg Lewis - BTIG, LLC - Analyst : Daryl, thanks for everything, congrats, and maybe I'll see you on circuit. Jon, I was hoping to get some more color around the guidance change as I kind of do the implied for Q4, and it is what it is. Is there any way to parcel and realizing visibility is challenged, but is there any way to think about the high end and the low end and really is that going to be around revenues, margins, like any kind of more color as we try to nail down that Q4?

Question: Greg Lewis - BTIG, LLC - Analyst : Okay, great. And then just, I did want a little bit more color around the share repurchases, how we're thinking about that? Was that just opportunistic or is, we're here, this is something we're going to look to continue to do. And maybe it's not going to be continual given the outlook maybe for Q4, but any kind of broad thoughts about how you're thinking about the buyback here just given where the stock is?

Question: Mike Shlisky - D.A. Davidson & Co. - Analyst : Good morning, and thanks for taking my question. And Daryl, of course, thank you for your partnership overall these years. I really appreciate everything.

Question: Mike Shlisky - D.A. Davidson & Co. - Analyst : Yes. So John, you just touched on it briefly in passing in your last answer, but it does look like Ford had essentially resolved the strike overnight. I guess, do you feel materially better about your near-term prospects today compared to yesterday especially regarding the Kentucky plant that was on strike? And do you have any feel for whether (inaudible) will get better coming out of Kentucky after the strike than we have before?

Question: Mike Shlisky - D.A. Davidson & Co. - Analyst : Got it. I also wanted to touch on the battery issue as well. Are there any costs that Shyft Group will have to incur that you hadn't foreseen, thanks to the issues that are going on with the supplier or the cost to fixed what's going on strictly going to be borne by that supplier.

Question: Mike Shlisky - D.A. Davidson & Co. - Analyst : One last one for me and that is the EBITDA in the SV Group was relatively flat despite, I guess, the RV business being down over the prior year. I'm just curious, is the RV business generally that challenge on EBITDA that we have a large decline and have no change and the with EBITDA? Is there anything you can do to fix that issue you're working on to get margins in the RV business to improve a bit?

Question: Mike Shlisky - D.A. Davidson & Co. - Analyst : All right. Thanks so much. I appreciate it.