The Shyft Group, Inc.

Good morning and welcome to the SHIFT Group fourth quarter and full year 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Juris Paygrabs, Group Treasurer and Head of Investor Relations. Please go ahead.

Thank you, Andrew, and good morning, everyone, and welcome to the SHIFT Group's fourth quarter and full year 2020 earnings call. Joining me on the call today are Daryl Adams, our President and Chief Executive Officer, and John Duyard, our Chief Financial Officer. For today's call, we've included a presentation deck, which will be filed with the SEC and is also available on our website at theshiftgroup.com. You may download the deck from the Investor Relations section of the website to follow along with our presentation during the call. Before we start today's call, please turn to slide two of the presentation for our Safe Harbor Statements. You should be aware that certain statements made during today's conference call, which may include management's current outlook, viewpoint, predictions, and projections regarding the SHIFT Group and its operations, may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. I caution you that, as with any prediction or projection, there are a number of factors that could cause the SHIFT 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. However, there may be other risks that we cannot anticipate. On the call today, we will provide a business update before moving on to a more detailed review of the results and our outlook for 2021. We will then open the line for Q&A. I would like to remind everyone that With the divestiture of the emergency response business on February 1st this past year, the revenues and expenses associated with the ER business, as well as the assets and liabilities, have been reclassified as discontinued operations for all periods presented. With this reclassification of the ER business, the results discussed today will refer to continuing operations unless otherwise noted. At this time, I'm pleased to turn the call over to Darrell for his comments beginning on slide three. Thank you, Juris. Good morning, everyone.

Thank you for joining us to discuss our fourth quarter and full year 2020 results. While 2020 has been categorized by many as unprecedented and challenging, for the SHIFT group, it was historic and transformational as we strategically aligned our product portfolio toward more profitable growth markets, starting with the sale of our ER business. The SHIFT team showed immense resilience and I cannot be more proud of their hard work and tremendous effort as they executed on our strategy and delivered a remarkable year. We invested in innovation with the launch of Velocity, our purpose-built walk-in delivery van vehicle, and in supporting our customers' growing interest in transitioning to EV technology. We continued with our M&A initiatives, completing our key acquisition in 2020 that expanded our product offerings in the service truck body market. We strengthened our leadership team and added key positions throughout the organization to support our growth, as well as adding several highly qualified directors to our board. As we continue to evolve, we are optimistic as we enter 2021 and are more prepared than ever to proactively address opportunities prioritizing the needs of all of our stakeholders in a way that reflects our goal to be nimble, aggressive, and positioned to win. We have emerged from 2020 in a stronger position and are well-equipped to drive growth across our businesses for years to come. Please turn to slide four where I'll discuss the current environment. Consumers continue to embrace e-commerce at accelerated rates, driving increased demand in parcel delivery, and establishing a new normal for delivery capacity. This demand has required our customers to increase their delivery vehicle fleet size, which is reflected in our backlog as we ended 2020 with nearly 500 million, up 40%, which provides us with good visibility as we head into 2021. To help our customers meet this growing demand, during the fourth quarter, we began taking orders for the Velocity F2, a purpose-built walk-in van design with a Ford Transit Class 2 chassis. This innovative new vehicle is an ideal solution for parcel delivery fleet operators that want to expand their fleet and delivery capacity quickly and complements the Velocity F3 and M3 vehicles providing our customers alternative solutions to meet their needs. And in January, we announced Velocity F2 orders totaling 3,000 units from several customers, for delivery this year. We are scheduled to begin delivering on these orders later this month from our newly upgraded flexible manufacturing facility located in Charlotte, Michigan. The adoption of this vehicle is a great example of our work-driven design methodology, where we listen to our customers' needs, design, engineer, and implement a solution. In this instance, our engineers hit it out of the park. As we fulfilled our customers' demand, for a more versatile and efficient delivery vehicle. We continue to make investments in support of our flexible manufacturing strategy, which allows us to expand product offerings geographically and to rebalance our infrastructure to support higher levels of growth over the long run. We are introducing truck body manufacturing in Kansas City and service body capabilities at our Florida and Michigan locations, which includes the addition of a new chassis pool. We continue to expand our EV capabilities and continue to invest in this area to proactively address our customer's mandate to advance adoption of green vehicles in the last non-delivery segment. To that end, we are excited about the progress the OEMs have made. In particular, the Ford Transit BEV coming out later this year. I would take a moment to address what we are seeing with respect to the availability of semiconductor chips used in vehicle manufacturing. which has been heavily publicized recently. To date, we have seen very little impact on our operations. However, it may be a bit too early to assess the full impact of these shortages, and we will continue to monitor and keep you apprised of changes. Our luxury motor coach business continues to perform well, benefiting from the resurgence of the RV industry, as did our service body business resulting from the Royal Truck Body and Duramax acquisitions, ramping up nicely since the peak of the pandemic. The team at DuraMag, which we acquired last October, hit the ground running and our integration efforts are well underway. We quickly partnered with their management team to make improvements in production flow that has resulted in additional output and cost reductions. Together with Royal Truck Body, we continue to be excited about the value creation opportunities these companies provide. With that, let me take a moment to summarize our full year results on slide five. For 2020, we posted solid results despite the significant impact of the pandemic. Once again, our results demonstrate the success and effectiveness of our business transformation strategy, which encompasses growth in higher margin product offerings within our core markets, increasing market share within our expanding geographic footprint, and ongoing productivity improvements within our operations. Revenues for 2020 increased $10.9 million, or 2%, to $676 million, excluding the UPS order. Adjusted EBITDA for the year increased $12.3 million, or 19%, to $76 million. And our adjusted EBITDA margin improved 280 basis points to a record 11.3%, clearly reflecting the power of our business transformation efforts. With that, I'll turn the call over to John to discuss SHIFT's financial results for the fourth quarter in more detail, as well as provide our 2020 outlook, beginning on slide six.