The Shyft Group, Inc. (NASDAQ:SHYF) Q4 2023 Earnings Call Transcript

John Dunn : And really the driver of the delay was the battery that threw us a curve with Proterra involved by Boeing. And we had technical issues candidly with Proterra as well at all related to the battery the vehicles fantastic. When we get the vehicle on the road the customers use it a lot of enthusiasm around the vehicle. So our challenge is really to make sure we have a battery that meets all the requirements. We have a new partner and one for they were the original tenant battery supplier for Class V. So it wasn’t a new supplier to us just pulling them ahead into this Class III, IV walk-in van. So there was some work already done, which helps us accelerate, but we’re going through that validation to make sure when we put a vehicle to market it’s going to be at the right quality level and really deliver the performance long-term that we expect and our customers expect.

Steve Dyer : So given that it sounds like this year is primarily a testing and validation year again then you still feel like demand is quite solid there.

John Dunn : We do, meeting with customers. I met with customers personally and there’s a lot of enthusiasm, as I’m around the vehicle some excitement to just get it in their hands, but we don’t want to rush it, from what I’m hearing that that battery, the final touches and that performance is that the right level. You get one chance to make sure they’re satisfied.

Steve Dyer : Yes. And then can you just kind of refresh our memory Randy Marion order of their reserve any time lines or parameters around that when you announced it and sort of when you would expect that to begin shipping?

Jon Douyard: Yes, I think the random in order when we announced it was a multi multi-year order. Certainly, as we look at the demand side of things and what our production was likely going to be one of the first [Technical Difficulty]

Steve Dyer : I lost you there at the end Jon, but we can we can take that offline. Okay, go ahead.

Jon Douyard: They know they’ll be one of the first customers that we deliver to in the second half of the year.

John Dunn : So the first group of vehicles their blended rate in that they will get vehicles as soon as we’re ready to give it time.

Steve Dyer : Got you. Okay. Last question for me. Just housekeeping you talked about share repurchases. How many repurchase shares did you repurchase I guess both in Q4 and then also the year if you have that in front of you?

Jon Douyard: Yes, we did. We didn’t repurchase anything in Q4 for the year. We repurchased a lot of money. It’s got one million shares.

Q – Steve Dyer: Yes. Okay. And was it pretty front-half loaded. I’m just trying to recall, what you’ve said previously now.

Jon Douyard: It’s mixed between Q1 Q3.

Q – Steve Dyer: Right. Got you. Okay. Thanks very much.

Operator: Thank you. And the next question comes from Greg Lewis with BTIG.

Q – Greg Lewis: Yes, thank you and good morning, and thanks for taking my questions. John, in the prepared remarks you mentioned the ongoing dialogue with Volvo around the battery, I guess what went when should we think about this being, I mean honestly finalized and then just thinking about some of the challenges, we had over the last year realizing Volvo is a little bit different of a company than the previous supplier. What are the thoughts around maybe a Plan B here, just to avoid potential? And I don’t know, supply chain issues down the road?

John Dunn: Thanks, Greg. What we’re looking at it and maybe didn’t come across, as clear as it could have. We’re all in right now working with one or that new battery source, there — who were focused on the validation on in parallel we don’t want to just walk away from Proterra and which is now Volvo. So we’re still waiting to understand with Volvo their intention and they’re going through that reorganization with the Proterra group. And we expect to know more, in the next four to six weeks on how we want to proceed. The key point there is, we’ll invest the resources needed to solve some of the challenges the issues we had with the battery. But our goal is the detailed source. So we would like them solve that problem and have that be an option as well.

Q – Greg Lewis: Okay, great. And then just Jon on the kind of the EBITDA guidance for Q1 and full year obviously, especially was degrading Q4 — is there some seasonality why it looks like those EBITDA margins are going to come under pressure in Q1? I guess before looking at — playing with numbers and guidance before kind of rebounding to that kind of Q4 run rate. Is that the right way to be thinking about that

Jon Douyard: In SV, specifically or broadly

Q – Greg Lewis: No, just specifically around specialty.