The Shyft Group, Inc.

Good day, ladies and gentlemen, and welcome to the SHIFT Group's first quarter 2021 earnings results. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Juris Paygrabs. Sir, the floor is yours.

Thank you, Dagma, and good morning, everyone, and welcome to the SHIFT Group's first quarter 2021 earnings call. Joining me on the call today are Darrell Adams, our President and Chief Executive Officer, and John Dooley, our Chief Financial Officer. For today's call, we have a presentation deck, which has been filed with the SEC, that is also available on our website at theshiftgroup.com. You may download the deck from the Investor Relations section of our 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 statement. 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 on 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 segment update before moving on to a more detailed review of the results and our outlook for the remainder of 2021. We will then open the line for Q&A. I would also like to remind everyone that with the divestiture of the emergency response business last year on February 1st, 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, the results discussed today will refer to continuing operations unless otherwise noted. At this time, I'm pleased to turn the call over to Daryl for his comments beginning on slide three.

Thank you, Jairus. Good morning, everyone. Thank you for joining us for the first quarter 2021 results. Our performance in the first quarter continues to demonstrate the success of our business strategy, which encompasses growth and higher margin product offerings within our core markets, increasing market share within our expanding geographic footprint, and ongoing productivity improvements within our operations. As you see on slide four, the strategy coupled with our commitment to invest in innovation, sorry, innovative products designed to meet customer needs resulted in our backlog increasing over 90% to a record $667 million for the quarter. We are excited with this level of our backlog and our strong start to the year as we achieved first quarter revenues of $198 million and adjusted EBITDA of $19.2 million. Please turn to slide five, where I'll provide a segment update. I'd like to start by sharing what we are experiencing with respect to the supply chain uncertainty and chassis availability due to the semiconductor shortage. During the first quarter, we saw little impact on our operations. However, based on our feedback from OEMs and suppliers, chassis deliveries will be impacted at some level for the next several quarters. We will continue to monitor the situation and adapt... accordingly although with their higher than expected backlog we remain confident we will deliver on our original guidance for 2021 starting with fleet vehicle and services we continue to make progress in a variety of areas from an operations perspective our ongoing focus and investment in manufacturing capability continues to have an impact as we set a new record in production at the bristol facility The velocity launch is progressing well. We are slightly ahead of our ramp curve and have started hiring our second shift to accomplish the next phase of the ramp curve. We are extremely happy with the quality of the product at this early stage of the launch and look forward to seeing the velocity product on the road. Underscoring our flexible manufacturing strategy, we successfully completed the initial build of 500 truck bodies at our Kansas City facility. on developing and introducing purpose-built vehicles to meet our customers wide-ranging needs continues to boost our backlog we have talked in the past about the velocity m3 and i'm happy to report that we secured an initial order for more than 350 units we continue to make progress on the velocity r2 product and are preparing a demo vehicle for testing with a major customer this month Moving to our specialty vehicle segment, we generated significant growth in sales and adjusted EBITDA as our efforts continue to produce positive results. Our motorhome market share during the quarter increased to 30.5%. That's up over four points since 2018. It reflects the strength of our product offerings and our brand among motorhome buyers. As part of this effort to drive sales and market share growth, we are introducing nine new technologies on our upcoming 22 and 23 model year chassis. Across our service body business, we've had several positive developments in the quarter that exemplify our strategy and ability to create value from acquisitions. Our rail truck body team achieved record revenue in March while also doubling its backlog year over year. Our recently expanded service body outfit center in Charlotte, Michigan was granted GM ship-through status, which will benefit both Royal and Durameg as we move forward. As it relates to innovation, Royal has expanded its service body offering to include an E-coated steel body that meets or exceeds our competitors' corrosion-resistant levels, now enabling broader market use in northern states where harsher weather conditions exist. And at Durameg, we continue to make manufacturing improvements and are on track to deliver on our integration plan. With that, I'll turn the call over to John to discuss SHIFT's financial results for the first quarter in more detail, as well as provide an update on our 2021 outlook, beginning at slide six.