The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Felix Boeschen - Raymond James - Analyst
: I think so. I'll ask you some questions, if that's okay.
Question: Felix Boeschen - Raymond James - Analyst
: So I appreciate all this. I guess I wanted to start big picture, Daryl. You called it a third transformation. I think that's a really interesting way to put
it. You obviously divested the firetruck business. Parcel became a real big growth avenue. And now it seems like it's a lot about EV. So maybe help
us understand, how do you think about the composition of the portfolio long term? You still have service body as a growth business. Trying to
understand, where are you today versus where you think Shyft might be in the next two, three, four years from the portfolio composition standpoint?
Question: Felix Boeschen - Raymond James - Analyst
: That's helpful. Just to talk about EV, you put out $500 million. That's up a lot versus your first target. Maybe talk to us about what surprised you, or
maybe what hasn't surprised you as you've undergone this new endeavor of electrification and, frankly, building your own chassis.
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MARCH 06, 2023 / 2:15PM, SHYF.OQ - Shyft Group Inc at Raymond James Institutional Investors Conference
Question: Felix Boeschen - Raymond James - Analyst
: Yeah, and I do want to talk about your announcement earlier today. But before we do, could you level set for us just maybe the unit economics?
Meaning, if you do an ICE van today, and you upfit, you put the body on, what's the content to Shyft? How is that going to compare to your, I call
vertically integrated, but more integrated electric walk-in van?
Question: Felix Boeschen - Raymond James - Analyst
: That's exactly what I wanted. So the only other part of this is, you've talked about mid-teens margins long term for the business. Can the EV fall
into that? Is that going to be in that range? I'm just kind of trying to understand, does the $160,000 drop down just like it would if you're upfitting
an ICE chassis or building a body on top of it?
Question: Felix Boeschen - Raymond James - Analyst
: And you mentioned the $75 million cost. Can you maybe help us frame OpEx, CapEx percentages of that and how you ultimately think about R&D
spend sort of long-term for Shyft?
Question: Felix Boeschen - Raymond James - Analyst
: Got it. And I said this with my first question, I guess not my fifth question. But you did have an announcement out earlier today about the certification.
Daryl, can you talk about that? What does that mean? And you've been prudent in taking orders, is maybe the best way to put it. How do you think
about opening up the order books for your EV?
Question: Felix Boeschen - Raymond James - Analyst
: Helpful. Just before we leave the EV discussion, I want to ask you about something you said in your last earnings call. And that's this new Class 5
product that you're talking about. Can you explain to us what that is? How is it different versus what you've been working on with the 3, 4 chassis?
Question: Felix Boeschen - Raymond James - Analyst
: And Joe, could you just expand what is a Class 2?
Question: Felix Boeschen - Raymond James - Analyst
: Yep. Got it. That's helpful. I think we only have five minutes. But I wanted to ask you about something else you brought up on your last earnings
call. And you kind of hinted at it. But you said there's expansion happening in specialty vehicles. Could you talk about the platform in specialty
vehicles? Was that on the service body side? How are you thinking about that growth profile?
Question: Felix Boeschen - Raymond James - Analyst
: And that's the service body side.
Question: Felix Boeschen - Raymond James - Analyst
: Got it. Just one question about the current environment. If I look at the 2022 chart you have in parcel revenue as a percent of total, it's actually
down relative to the last chart that you showed. Could you talk about maybe what you're seeing out there from your big parcel customers? How
are they thinking about orders this year into next year? And when do you think we see that replacement demand kick in?
Question: Felix Boeschen - Raymond James - Analyst
: From an outlook perspective.
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MARCH 06, 2023 / 2:15PM, SHYF.OQ - Shyft Group Inc at Raymond James Institutional Investors Conference
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