The Shyft (US:SHYF)2022-07-28 23:03Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $232.2 million, down 4.8% year-over-year but up 12.2% sequentially [25] - Net income from continuing operations was $5.3 million, compared to $17 million a year ago [25] - Adjusted net income was $7.5 million, down from $19 million in the prior year [26] - Adjusted EBITDA was $13.7 million, compared to $28.6 million in the previous year, with a margin decline to 5.9% from 11.7% [27] Business Segment Data and Key Metrics Changes - Fleet Vehicle Services (FBS) revenue was $136.9 million, down from $161.6 million year-over-year, with adjusted EBITDA of $14.5 million [28][30] - Specialty Vehicles (SV) revenue increased to $95.3 million, up 15.7% year-over-year, with adjusted EBITDA of $12.9 million, representing a margin of 13.5% [31][32] Market Data and Key Metrics Changes - Backlog was $1.1 billion, up 51% year-over-year but down 11% sequentially [13] - FBS backlog was $1 billion, up 53% year-over-year [30] - SV backlog increased by 37% year-over-year to $135 million [32] Company Strategy and Development Direction - The company is focused on managing supply chain disruptions and inflationary pressures while investing in automation and lean principles [9][12] - Continued development of the Blue Arc Electric Vehicle is essential for long-term sustainable fleet operations [11][21] - The company aims to maintain a strong balance sheet to support growth initiatives, including EV investments [34][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year due to improved chassis supply and strong demand [10][35] - The updated 2022 outlook includes revenue guidance of $925 million to $1.1 billion and adjusted EBITDA of $55 million to $80 million [36][37] - Management noted that the demand remains strong despite some cancellations due to chassis timing issues [49][60] Other Important Information - The company launched the Red Diamond aftermarket brand to expand its luxury motorhome parts and service business [19] - The Bristol facility installed an automated robotic painting system to enhance operational efficiency and sustainability [16] Q&A Session Summary Question: Supply chain disruptions - Management confirmed that chassis supply is the primary issue but noted improvements in flow [45][47] Question: Backlog and cancellations - Management indicated a modest level of cancellations but emphasized strong underlying demand [48][50] Question: Blue Arc EV customer testing - Management is preparing vehicles for customer testing and expects production to start in the second half of 2023 [53][55] Question: M&A opportunities - Management is monitoring potential acquisitions and expects better opportunities in the second half of the year [68][69] Question: Long-term vehicle demand - Management anticipates a 2 to 3-year recovery period for normal supply levels and fleet replacement [81][82] Question: Red Diamond brand initiative - Management sees potential for long-term value in the Red Diamond brand but considers it early days for expansion [101][102]