The Shyft (US:SHYF)2021-11-06 21:32Financial Data and Key Metrics Changes - The company reported a record revenue of $273 million for Q3 2021, representing a year-over-year growth of 34% [11][18] - Income from continuing operations was $21 million, or $0.58 per share, reflecting an 8% increase compared to the previous year [11][18] - Gross margin for the quarter was 20.6%, consistent with year-to-date levels, despite challenges from inflation and supply chain disruptions [18][21] - Adjusted EBITDA from continuing operations increased to $33.7 million, up from $32.6 million last year, with an adjusted EBITDA margin of 12.4% [21][18] Business Line Data and Key Metrics Changes - Fleet Vehicles & Services (FVS) segment achieved revenue of $198.5 million, up 36.7% from $145.2 million a year ago, driven by strong demand for parcel delivery vehicles [22] - Specialty Vehicles (SV) segment sales were $74.1 million, an increase of 27.1% year-over-year, with adjusted EBITDA of $5.8 million [24] - FVS backlog increased by 15% sequentially and 231% year-over-year, while SV backlog rose 82% to $94 million [23][24] Market Data and Key Metrics Changes - The company received an add-on order from USPS for 447 truck bodies, representing $53 million in revenue, with production expected to begin in Q2 2022 [12] - Demand for refrigerated delivery vehicles is increasing, with over 500 units ordered from grocery chains [13] - The luxury motor coach chassis market share increased to 31%, with a peak of 37% in August [15] Company Strategy and Development Direction - The company is focused on expanding production capabilities and leveraging flexible manufacturing strategies to meet growing demand [13][14] - Shyft Innovations is dedicated to developing electric vehicle chassis and new walk-in van body designs, with a new R&D facility opened [16] - The company aims to continue investing in operations and technologies to drive future growth while managing supply chain challenges [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain challenges but expressed optimism about underlying demand for products and the ability to sustain growth [26] - The company raised its 2021 guidance for revenue to $950 million and adjusted EBITDA to $109 million, reflecting confidence in performance [27] - Management expects inflation and supply constraints to persist into 2022 but is taking actions to mitigate impacts [26] Other Important Information - The company was named in the 2021 Fortune 100 Fastest-growing Companies list, highlighting its strong performance and resilience [10] - The divestiture of the Emergency Response business has been reflected in the financial results as discontinued operations [7] Q&A Session Summary Question: Margin performance and inflation impacts - Management acknowledged headwinds from product cost and labor inflation but noted efforts to manage pricing and supply constraints [34][35] Question: USPS order and backlog clarification - The $53 million USPS order is included in the FVS backlog, with healthy trends in order flow across various products [37][38] Question: Supply chain improvements - Management indicated that supply chain conditions remain challenging, with no significant improvements expected in the near term [44] Question: Capital allocation and acquisition strategy - The company continues to explore acquisition opportunities but has not executed any recent deals due to market conditions [46][48] Question: Manufacturing capacity and expansion plans - Management is considering expanding facilities in Pennsylvania and Kansas City to accommodate growth [52][54] Question: Grocery market opportunities - The company is actively engaging with grocery customers to provide tailored delivery solutions, recognizing the evolving market needs [56][59] Question: Velocity product lineup and chassis updates - The Ram chassis is ready for production, with expectations for orders in early 2022, while Mercedes orders are also in the backlog [61][62] Question: Specialty Vehicles margins recovery - Management expects to see incremental improvements in margins as pricing actions take effect and backlog is processed [64]