Shyft Group Inc (SHYF) 2022 Q2 法說會逐字稿

Good morning, and welcome to The Shyft Group's Second Quarter 2022 Conference Call and Webcast. (Operator Instructions) This call is being recorded. (Operator Instructions)

I would like to introduce Randy Wilson, Vice President, Investor Relations and Group Treasurer for the Shyft Group. You may proceed.

Good morning, and welcome to the Shyft Group's Second Quarter 2022 Earnings Conference Call. Joining me on the call this morning are Daryl Adams, President and Chief Executive Officer; and Jon Douyard, Chief Financial Officer.

For today's conference call, we have included a presentation which is filed with the SEC and is available on our website at www.theshyftgroup.com. You may download the presentation from the Investor Relations section of our website to follow along with our presentation during the call.

Please turn to Slide 2 of the presentation for our safe harbor statement. You should be aware that certain statements made during today's conference call regarding The Shyft Group and its operations may be considered forward-looking statements. I caution you that, as with any prediction or projection, there are a number of factors that could cause the Shyft Group's actual results to differ materially from projections. All known risks that management believes could materially affect the results are identified in our Forms 10-K and 10-Q filed with the SEC. Except as required by law, the company undertakes no obligation to update or revise its forward-looking statements.

I'd like to remind everyone that our divestiture of the emergency response vehicle business on February 1, 2020, is classified as discontinued operations. The results discussed today will refer to continuing operations unless otherwise noted.

With that, I'm pleased to turn the call over to Daryl Adams, beginning on Slide 3.

Thank you, Randy. Good morning, and thank you for joining us to discuss our second quarter 2022 results.

Before I begin, I'd like to welcome Randy Wilson to the Shyft Group. We are thrilled to have him on our team, and we look forward to Randy being an excellent liaison between the company and the investment community.

Turning to the quarter. We were pleased with our results as the team continued to manage through supply chain disruptions and inflationary pressures that are affecting the entire vehicle industry. Our Specialty Vehicle business once again delivered solid results and we continue to see strong demand across all of our products. We saw good margin expansion in the SV business, reflecting the continued efforts by our team to drive efficiency in our operations.

As we discussed on our last earnings conference call, chassis supply disruption continued to impact our fleet vehicle business. But we are pleased to report that disruptions peaked in April and availability improved steadily through May and June, which is why -- which was in line with our expectations. The improvement came from the release of units that were produced but on hold at the end of the quarter as well as increased production levels at the OEMs. While the OEMs are not yet back to full production, the improvement does give us confidence as we look out into the second half of the year.

We also continue to make progress on our Blue Arc electric vehicle, which is essential for our customers' long-term vision for sustainable fleet operations. Turning to Slide 4.

Demand within our market remained strong and backlog remains robust. In the quarter, we achieved revenue of $232 million, with the results of pricing actions partially offset the decline in unit volume given the challenges with chassis supply. Profitability was consistent with our previously communicated expectations as supply chain conditions improved compared to the first quarter.

Our team maintained a focused and nimble approach to our operations and remains committed to prudent cost management while also continuing to invest in automation and lean principles to drive efficiency in our operations. Backlog is $1.1 billion, up 51% versus prior year but down sequentially $138 million or 11% as production outpaced new orders.

Please turn to Slide 5, where we can discuss our business segments. We expect the Fleet Vehicle Services to have a difficult quarter given the chassis supply issues. That said, our team did not stand still. Throughout the quarter, we remained diligent in managing through supply chain disruptions, flexed production as needed, launched the Velocity M3 and R2 production vehicles, accelerated automation in our factories and continued to win new business.

I'd like to discuss 2 areas that highlight our growth efforts. In our truck body business, our backlog remains at all-time highs, and we have seen positive order trends from grocery and leasing. Also, we are continuing to make strides as we ramp production in Landisville, which will support the growth we are seeing in the business.

Second, we continue to invest in new technologies to enhance the efficiency of our operations and drive toward our goal of having more sustainable manufacturing processes. As an example, our Bristol facility installed an automated robotic painting system, which reduces material and labor costs, improves quality and lowers emissions of volatile organic compounds.

Turning to Special Vehicles segment. The business continued its strong performance for the first quarter as we are focused on our growth strategy. Even in the face of some supply chain challenges, our motorhome chassis business continued to perform well, and our service body business saw significant growth despite chassis supply constraints.

Team's efforts continued -- sorry, the team's efforts generated solid growth in the sales and demonstrated the operating leverage in our model with even better growth in adjusted EBITDA. [IN] Class A motor homes, our target segment of the RV market, is healthy as dealer inventories remain at historic lows, and our share continues to be very strong. We expect these trends to continue for the balance of the year.

In the quarter, we launched the Red Diamond aftermarket brand to expand our luxury motorhome parts and service business for RV, chassis and other motorhome chassis.

Across our service body business, we are executing on our strategy of expanding our position as a leading national service body player. We continue to make strides in our geographic expansion initiatives, and we saw continued progress in our Charlotte ship-through location with the shift to 2023 model year products.

Demand remains robust and customers manage pent-up replacement demand in addition to market growth. With continued healthy growth trends in our key markets, we feel confident in the continued performance of SV in the second half of the year.

Please turn to Slide 6. Blue Arc product development progress is on track as we hit key project milestones. We began to build prototypes and continued to solidify the supply base. We have made considerable progress and remain on track to deliver these exciting new products in 2023.

We remain excited about the feedback we received regarding Blue Arc EV solutions while attending the ACT show in May, and we continue to have high levels of interest from fleet operators and other locations.

Last week, I had the pleasure of joining Blue Arc team as they showcased the Blue Arc Power Cube and EV delivery vehicle in Washington, D.C. to members of Congress and governmental agencies. We highlighted our efforts to reduce greenhouse gas emissions and assist fleet operators in a range of industries to achieve their long-term environmental goals. We'll have customer visits, ride and drives and product showcases later this year and look forward to updating you on Blue Arc during the next earnings call.

With that, I'll turn it over to Jon.

Thank you, Daryl, and good morning, everyone. Please turn to Slide 8. Revenue for the second quarter was $232.2 million, down 4.8% from the year-ago quarter, but up 12.2% sequentially with seasonal increases and improvements in chassis availability. Net income from continuing operations was $5.3 million compared to $17 million a year ago. Adjusted net income was $7.5 million compared with $19 million in the prior year. Diluted earnings per share from continuing operations was $0.15 per share compared to $0.44 per share in the second quarter of '21. Adjusted EPS from continuing operations decreased to $0.21 per share from $0.53 per share a year ago.

Second quarter adjusted EBITDA was $13.7 million compared to $28.6 million in the previous year, while as a percent of sales, adjusted EBITDA declined to 5.9% compared to 11.7% in the same period last year. These results include EV spending of approximately $7 million. Excluding this investment, adjusted EBITDA as a percent of sales was 9%.

Turning to Slide 9, and I will review our results by operating segment. As previously communicated, we expected FVS to have a challenging quarter, driven by chassis availability impacting the production output and efficiency of our Velocity and traditional walk-in van product lines. This was particularly true earlier in the quarter, but we did experience the expected improvements in chassis flow and profitability as the quarter progressed.

FVS delivered revenue of $136.9 million compared to $161.6 million a year ago. The decline was primarily due to reduced production volume as a result of lower chassis supply, partially offset by higher pricing.

FVS adjusted EBITDA was $14.5 million versus $28.1 million a year ago. Adjusted EBITDA margin was 10.6% of sales. The decrease was primarily driven by volume and productivity inefficiencies as a result of OEM chassis supply, material and labor cost inflation, partially offset by pricing actions.

FVS ended the quarter with a robust backlog of $1 billion, up 53% year-over-year.

Turning to Slide 10. Specialty Vehicles delivered another solid quarter. Sales were $95.3 million, an increase of $12.9 million or 15.7% year-over-year, with strong performance in our service body, Builtmore contract manufacturing and luxury motor home chassis businesses. The growth was driven by strong sales volume coupled with the realization of pricing actions.

Adjusted EBITDA was $12.9 million or 13.5% of sales, up 280 basis points compared to $8.8 million or 10.7% of sales in the same period last year, primarily driven by higher sales volume, pricing actions and improved product mix, partially offset by material and labor cost inflation.

SV backlog was up 37% year-over-year to $135 million with growth in both Motorhome and service body backlog.

Turning to Slide 11, and I will discuss our balance sheet and updated 2022 outlook. Overall, our balance sheet and liquidity remain healthy despite the challenging macro environment. In the first half, our cash flow from operating activities was an outflow of $36.7 million compared to an inflow of $3.2 million in the first half of last year. These results were driven by increased inventory resulting from chassis and component delays. CapEx for the first half of the year was approximately $10 million.

At the end of Q2, we had total liquidity of $206 million, which includes $6.6 million of cash on hand. Our current leverage ratio stands at just 1.1x adjusted EBITDA, which positions us well to fund our operations and invest in our growth strategy. We are committed to maintaining a strong balance sheet and having the flexibility to execute our growth plans.

Turning to our outlook. Our view of the year remains generally consistent with our prior communication, which assumed that chassis supply would improve in Q2 and into the second half of the year. It is important to appreciate that we continue to operate in a dynamic environment. But with that said, our performance in the second quarter and our visibility to chassis supply positions us to increase the midpoint of our profit guidance.

As a result, our updated 2022 outlook is as follows: Revenue to be in the range of $925 million to $1.1 billion, adjusted EBITDA of $55 million to $80 million, including $30 million of expenses related to EV initiatives; adjusted earnings per share of $0.85 to $1.41 per share; and we continue to plan for $25 million to $30 million of capital expenditures in the year.

Overall, we remain confident in the underlying long-term growth trends for our products, and we are well positioned to support our customers. We will continue to leverage the strength of the balance sheet to position the company for future growth.

Now I'll turn it back to Daryl for closing remarks.

Thanks, Jon. Please turn to Slide 12. In summary, our team remains laser-focused on executing our growth strategy and driving long-term value for our customers, employees and shareholders. We will continue to invest in growth initiatives, including Blue Arc EV, which are supported by the strength of our balance sheet. Our second quarter results highlight the team's flexibility and resilience while continuing to deliver on our long-term strategic plans. With a strong team and a portfolio of innovative products, we are well positioned to perform in the second half of the year and into 2023.

Operator, we are now ready for the Q&A portion of the call.

(Operator Instructions) Our first question will come from Steve Dyer with Craig-Hallum.

I guess I'll start with supply chain. I guess, first of all, is it primarily chassis? Or are you seeing -- is there other disruptions as well?

And as it relates to chassis, clearly, they're starting to flow a little bit better. Would you say it's at the rate that you had hoped 3 months ago, when we talked?

Yes, I'll take that, Steve. So it is primarily chassis supply. We are seeing it in our own purchases, but we've been able to manage through those by -- as we've done in the past when volume increases rapidly, by bringing on additional suppliers. And I think Jon mentioned too, right, some of the inventory levels are higher waiting for some of those components, so we are managing through that. But without chassis, it's difficult for us to build.

And on your -- can you remind of your second question again?

It was just if you're seeing sort of the increase of chassis maybe at the rate that you had hoped or thought.

Yes. We -- I think on the SP side, it was probably -- we were more, I guess, happier with those. GM was starting to produce more, Ford starting to ship some more. But the real Achilles heel we had throughout Q2 was the DCP, which is walk-in van chassis. And they're running about where they typically would run. So -- and they've been doing that.

I think last time I mentioned, typically, 3 deliveries would create a trend, but we want to see 3 months or more of a trend here on the chassis. And they continue to have some ups and downs, but overall, they're averaging about what they have in the past. So we're excited about that moving forward.

Okay. Looking at your backlog, it's still a year of revenue long, which is second-best ever. It was down a little bit quarter-over-quarter. Just curious if you're seeing any cancellations in the customer base. And sort of how pricing is going when you're pricing out a year.

Yes, I think from a customer cancellation standpoint, I think it's an interesting environment. We did see, call it, a modest level of cancellations in the quarter. But in a number of those cases, we actually had other customers pick up those chassis.

And so as we've discussed in the past, a lot of the movement, and we haven't seen a lot of movement, but when we do, it's really related to chassis timing and whether that meets customers delivery needs in terms of when they get the vehicle. And so we expect maybe some continued movement there as we go forward. But I think to your point, we're still looking at a backlog that extends beyond a year in our FVS business right now, and feel really comfortable with the demand -- the underlying demand in the markets that we're playing.

I think from a pricing perspective, we've talked about going back into the backlog multiple times in evaluating sort of cost inflation and those types of items and being successful in repricing that. Our teams continue to look at that on a very regular basis, and we certainly have ongoing discussions with customers when needed in terms of making sure that we're maintaining profitability.

Got it. You talked about, when there's cancellations, it's typically because you can't get the chassis to meet the timing demand. I mean, is your perception that there's any competitors or anybody else that's having an easier time or better position than you guys?

No, not at this point. I think -- I mean, the chassis supply is impacting the entire industry. We don't see customers jumping from us to others. And so it's really about when that chassis comes in. I think the -- as new model years come out or allocations come out for 2023, we'd probably see a little bit more movement. But we're not seeing any significant share shifts, certainly not away from us.

Got it. Last one for me, and then I'll pass it along. As it relates to Blue Arc, just curious. Anecdotally, sort of what's the response been from some of your bigger ICE customers? Are they testing this?

And then as you look to next year, I mean, would you anticipate this being sort of a first half of the year, revenue generator? Or more second half?

Steve, thank you. So on the product and the customers. So I think as a reminder, our PoCs are done. As I mentioned, we're in -- starting to build prototypes. I think we have 3 of them started. But it's interesting, we have had a request from one of our customers that they want us to give them a vehicle before the end of the year for their testing plan because have a couple of others and I think one other they're bringing in. So we're making our effort to get that vehicle ready and get it to them so they could put it into their testing.

But our plan is to have the vehicles, prototypes built and on the road this year. I think we'll have our second PoC. We'll be at the track later this month -- sorry. Later in August. And by the end of the month, we should have some idea on our range, which we're excited to get that.

And then we'll build the demo units probably later this year into Q1 to then get them into the customers' hands. And then as we mentioned before, production should be starting in the middle of the second half of '23. So I don't think we'll see any revenue until later in the year next year.

Our next question will come from Matt Koranda with ROTH Capital.

Just wanted to follow up on the FVS backlog commentary. I just wanted to see if you could put a finer point maybe on why you're seeing some small level of cancellation with fleets. I guess, my assumption was there's a pretty good amount of pent-up demand. Those fleets have to get into the back of the line if they cancel orders. So any further commentary or just color on what you're hearing from customers would be super helpful.

And then what conditions do we need to see to kind of start to see order flow pick up again? Obviously, with the understanding that the macro backdrop is pretty weak here. But what are you hearing from folks in terms of when their appetite to increase orders would occur?

Yes. Matt, I'll start and maybe Jon can add in. So I think we've mentioned it on the last call, right, when we had some deterioration in the backlog, mainly because customers would put in orders with us and not have the chassis assigned to them from the OEMs. So when the OEMs look at who they're going to fill the orders to, it would be people that had the chassis committed to them. So that was some of the change.

Other parts of the change is when some of our customers looked at it and they can't get vehicles ahead of the busy season, right, or they're not getting the proper allocation from an OEM, let's say, on a transit van or a Ram ProMaster. They would pull the orders out.

So there's nothing -- Steve had a similar question. They're not hopping over to other chassis, they just can't get the chassis that they expected to get for the year for their orders.

You want to take the second half of that...

I think the other piece there, particularly when we had the -- we saw the OEM production gap in March and April. I think as they reallocated their production schedule for the balance of the year, there was some fall off for that which had some downstream impacts.

And so again, I don't think demand isn't necessarily an issue for us, particularly when you look at how far out our backlog is.

Okay. Fair. Any significant sort of chassis platforms to call out as maybe causing the issues? Or one you could pinpoint? Or is it sort of across the board when you look at sort of the major chassis platforms you build on?

I think right now, all of them are producing at a higher rate than they did in Q2. DCP was the real [ups] that we had problems with in Q2. I think we mentioned it a [windshield wiper] module and then the fuel tank quality issue. So those are resolved now.

And we also talked about how we went out in reengineered, reverse engineered and windshield wiper module so we could produce vehicles. So on both accounts, right, we have the ones that we were building, then we have the normal supply coming in from DCP.

So I think they're in good shape. They're running. And that doesn't mean that they won't have another supply issue in the past. But the last -- since the last quarter, we've seen -- they've hit everything they told us, and they're starting to hit the numbers that we typically would see.

I think on the -- some of the other cargo van type Class II vehicles, both of them are now producing at rates that we expected, and we're receiving vehicles. So I think I'm not going to say we're out of the woods yet, but we're seeing nice order flow, nice chassis flow. I mean, and hopefully, it will continue through the rest of the year. We're positive that -- on our numbers and look forward to getting back to some normal business.

Great to hear. And then maybe just on the M&A front, curious just given that we've had several months of public market volatility, I'd assume there may be some choppiness in private competitors or private concerns that you may be looking at as potentially strategic acquisitions. Curious what you're seeing on the M&A front, Daryl, just in terms of anything shaking loose, anything impending or interesting or heating up? Just given sort of the market weakness that we've had for the last several months.

I think when we look at that, Matt, we're still looking, right? We do think that, as you mentioned, right, there might be some better buys later in the second half of the year. So we are monitoring a number of companies, one in particular that we put a pause on because they had the same issue that we have with chassis, so we didn't want to continue to process that opportunity. We're still in communications with them.

So we are continuing to look around. And I think, as we normally would, if it's opportunistic, we're going to jump on it. But we also think that there might be some more opportunities later and maybe that are better buys.

Our next question will come from Felix Boeschen with Raymond James.

I know a lot of questions around orders and backlog. Daryl or Jon, I was hoping maybe we could take a step back. And I was hoping you could talk about maybe how you see parcel, last-mile vehicle demand longer term.

What I'm really trying to understand is, are your customers coming to you at all about longer-term capacity conversations, whether that's ICE or BEV?

But what I'm really getting at, you mentioned replacement demand. The Post Office came out and said they're going to buy almost 35,000 off-the-shelf commercial vehicles. I know they do buy a lot of sprinters, but I'm curious maybe how those conversations with your customers are going. And if you could just talk directionally about longer-term implications.

Yes. I think, Felix, on the chassis side of it, all those conversations are typically with our customers and the OEM chassis providers. But the feedback we're getting, right, as we mentioned before, they've not been able to get their typical replacement vehicles for 3 years now, 2.5 years, 2021 and this -- so far this year into 2022. So they can't replace the vehicles they have. They couldn't get vehicles to handle the growth that we're seeing.

And then when we drive around to the depots, right, near each of our locations, which we typically have people do, they see a lot of rental vehicles in the parking lot instead of the brand name of the company. So I think as we mentioned on the previous call, right, we see this, I don't want to call it pent-up demand, but there's been a lack of supply that will continue.

I think if -- no one's adding capacity, we have checked on that. So it's going to take a little bit of time for this supply shortage, if you will, over the last 2.5 years, to get back to where the customers could be replacing their fleets on a regular basis and buying for growth. So I think it could be probably a 2- to 3-year run until they get back to normal without the rental units in their fleets.

Jon, do you want to add anything?

And I mean, just to add on that, I mean, our expectation is that fleets continue to grow. I think the e-commerce trends, while not necessarily linear, the expectation is that continues to impact, volumes go up over time. And so I think that's positive from a fleet perspective.

I think to your USPS question, I think we'll see how that plays out. There are a couple of items that came up there, one on EV, one on commercial off the shelf. We are upfitting vehicles for them today. And so certainly, it could be an opportunity for us as we move forward, but probably early days on that one.

Okay. That's helpful. And then it sounds like, on the EV side, everything is sort of on schedule. Jon, I was hoping we could maybe get an update on sort of your total cost expectations. I think previously, we had talked about $50 million to $75 million with maybe a 60% R&D mix. Curious if that's changed at all or now with the Power Cube. Or how you're thinking about it maybe going into 2023.

Yes. I mean, our investment on that, which we put out on the Class III vehicle remains consistent. And so we continue, to your point, to be executing along the development milestones and are in line for production here in the second half of the year. We continue to refine production plans and those types of things. And so the numbers may move around a little bit, but our expectation is that we're still in the range that we previously communicated.

Okay. So put another way though, R&D expense should continue to kind of ease into 2023 as we think about the back half of 2022?

Yes. I think there will certainly be a step down as we get into '23.

Okay. And then lastly, the Specialty Vehicle margins looked really great. I'm curious if you could maybe comment on what specifically drove that and how you may be thinking about margins for the back half of the year in that business.

Yes. I think the -- they had another great quarter, and they really put a string of great quarters here together. I think we talked previously about -- on our service body strategy in particular, about being able to acquire businesses and create value through lean initiatives. And so we've been able to see the supply chain or the production benefits of that over time in terms of margin expansion, and our teams will continue to evaluate that.

We've certainly been in a position where we've been able to drive pricing into those markets as well. And so we would expect that to continue here into the second half of the year.

I think the motorhome business is a similar story in terms of just operating efficiency that we've been able to get into the business. In contract manufacturing, particularly with the launch of the F-Series, I think that was in Q4, we've seen volume increases.

And so across the board, we've been able to drive operating efficiencies while also gaining the leverage benefit from the growth that we're seeing in the markets.

Our next and last question will come from Mike Shlisky with D.A. Davidson.

I wanted to maybe first ask another question about the backlog and the situation there. Maybe kind of to summarize all your answers today. Is it -- is your feel, with backlog down slightly, that at this point, it's more of a sigh of relief given how high they were?

And can you give us a sense as to what number of months would you like to have in the backlog on a more normalized basis? It was probably not 13 to 18 months here. What makes more sense for you eventually for things to kind of settle out?

Yes. I think historically, we've operated in that 4- to 6-month range, which is probably where we can be efficient. And so I think, eventually, we will get back to that range. I don't know if I would say call the second quarter necessarily relief. But remember, we did come off record orders in the first quarter.

And so I think from a fleet planning perspective as well as an OEM chassis allocation perspective, that's really done for 2022. And so the order books will start opening here for '23 out in the next couple of months. And so we would expect to see some activity from that perspective.

But we don't necessarily view it as, call it, anything abnormal. I think to the point we made earlier, I think the demand remains strong and our expectations in sort of the long-term fundamentals of the markets remain healthy. And so we feel like we're in a good position from that perspective.

Great. I also want to ask about maybe on the back half of the year guidance and the cadence here. Assuming there's no reversion to some of those other types of supply and things kind of trend back in the right direction as they have been, is it fair to say that we'll be seeing sequential improvements in 3Q, 4Q and even the first part of 2023? Again, barring any steps backward on the supply chain.

Yes. I mean I think we're seasonally a little bit higher in Q3 typically. And so this is not quite a normal year. So you're potentially maybe a little bit flatter in the second half of the year than what we would typically see. But certainly from a run rate perspective, as we get into the second half, it will feel a little bit more normal, and we expect that to continue into '23.

Great. Got it. And then maybe I want to ask another question about the Senate bill that came out, I think it was yesterday, with some new subsidies for EVs and what that means for Blue Arc. It sounds like it has to be a Class IV or larger, so Blue Arc might not qualify for the largest subsidies, but there is a decent size for 14,000 pounds and under.

I'm curious if you can tell us, do you feel that, that could be a material driver if that bill passes for the first wave of Blue Arc sales late next year?

Yes, Mike, I'll take that. I think it's too early. The Bill was out as we were just in D.C. last week. And then I think there's a lot of money floating around, whether it's at the federal level or state level. We do have teams working on it.

I think one of the things to remember, right, is that Blue Arc will have a Class V vehicle as well shortly after the Class III launches. So it doesn't mean we won't be excluded from that. So we're going to try to move into that Class IV and higher range as well.

So it's early in the Bill. I mean, it takes some time to shake out. But we will definitely be -- have people looking at it and trying to figure out how it can help us.

Got it. If I may just squeeze one last one in here. I wanted to just get a sense as to how things are going, early days, with the Red Diamond brand. I guess I'm curious for, a, how it's going. But also is this the kind of brand initiative that can be expanded to all your products, either for efficiencies or just to have a brand behind your parts and service more broadly?

Can you take the financial question?

Yes. I mean, I think it's early days, but it's an opportunity for us to sort of expand the view of what our parts and service has been historically, right? I mean, we've traditionally been focused on serving Spartan RV chassis customers. And so this provides an opportunity for us to work with other suppliers and manufacturers, to expand that into other chassis providers. And so we think there's long-term value there and certainly have expectations of that. But in the short term, certainly seeing some positive strides, but I would say it's early days.

And Mike, on your question about crossing over brands. I don't see that. I think this is going to be strictly in the motorhome space. Those are the products they have because people are calling in Utilimaster for some type of a service product, it's mainly shelving units or something like that, that they've built and they have the expertise to build it there.

So right now, it could transform into that. But right now, I think it's going to be just on the motorhome side and maybe into the service body, right? Because that's -- both of those are under Steve, but I don't think there's any plans on drawing board for that yet.

This concludes our question-and-answer session. I would like to turn the conference back over to Randy Wilson for any closing remarks.

Thank you, operator. A replay of our call will be posted on our Investor Relations website. Also, please see the Investor Relations website for details regarding future investor events, including the Raymond James and D.A. Davidson conferences.

Thank you for your interest in the Shyft Group. And with that, I'd like to conclude today's call. Operator, you may disconnect the call.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.