The Shyft Group, Inc.

Good morning, and welcome to the SHIFT Group's second quarter 2024 conference call and webcast. All participants will be in a listen-only mode until the question and answer session of the conference call. As a reminder, this call is being recorded. I would like now to introduce Randy Wilson, Vice President of Investor Relations and Treasury for the SHIFT Group. Please go ahead.

Good morning, and thank you for joining us. Today, you'll hear from John Dunn, President and Chief Executive Officer, and John Duyard, Chief Financial Officer. Their prepared remarks will be followed by a question and answer session. Before we begin, please turn to slide two of the presentation for our Safe Harbor Statement. Today's conference call contains forward-looking statements, which are subject to risks that could cause actual results to be materially different from those expressed or implied. Primary risks that management believes can materially affect our results are identified in our Forms 10-K and 10-Q filed with the SEC. We will be discussing non-GAAP information and performance measures, which we believe are useful in evaluating a company's operating performance. Reconciliations for these non-GAAP measures can be found in the conference call materials. We will begin with a business overview from our CEO, John Dunn, followed by John Dewyard's review of second quarter performance and our 2024 outlook. We'll then open the line for Q&A. Please turn to slide three, and I'll turn it over to John Dunn, who will begin today's prepared remarks.

John Dunn, Thank you, Randy, and good morning. I would like to welcome everyone as we discuss our second quarter performance, as well as the exciting strategic announcement we made this morning regarding the acquisition of Independent Truck Upfitters, a unique business that aligns well with our growth strategy. For the quarter, We were pleased with our performance given the environment as we saw benefits from our focus on operational efficiency. Overall, we delivered $12.5 million of adjusted EBITDA with significant improvement in our FES business with margin increasing to high single digits in the quarter. We have made organizational changes at the corporate office as well as in the businesses as we continued to drive efficiency across the company. We announced earlier in the quarter an order from FedEx, a longtime partner, for 150 Blue Arc trucks. The Blue Arc team also achieved key project milestones as we transitioned to production, and we will deliver trucks to customers by the end of the year. Overall, I want to emphasize that SHIFT team members are acting with urgency to drive improved results with focus on commercial activity, profitability, and cash flow. Please turn to slide four, and I will expand on our progress. Back in February, I introduced an operating framework to drive sustainable financial growth. This framework is anchored by the following pillars, high-performing teams, operational excellence, customer centricity, and financial growth. We continue to make progress across all pillars. We saw operational benefits in both margin performance and the quality scoring that we have recently received from our customers, which position us well for additional business in the future. We have also increased customer engagement. When I meet with customers, I consistently hear that they appreciate our partnership and are supportive of exploring additional opportunities where we can provide value and ultimately grow Shift's share of the business. With that said, today I want to go into more detail and share recent progress on the team and growth actions. Overall, our high-performing teams are collaborating, holding each other accountable, and working efficiently to deliver for our customers. In the quarter, we were proud to launch our safety initiative, Mission Zero. Team member safety is not new here at SHIFT, but we have made great strides over the past couple of years. A safe work environment is fundamental to ensure that we are a great place to work. Our safety mission is straightforward. Zero incidents, zero injuries, every job, every day. In addition, we have made great strides in streamlining our leadership structure, empowering our teams, and recruiting top talent. We consolidated leadership roles at the corporate office and in the FES and SV businesses, while also flexing our operations to reflect the current environment. We will continue to focus on efficiency and flexibility in these areas moving forward. Turning to financial growth, I'm thrilled to discuss the acquisition of Independent Truck Upfitters, or ITU, which we announced this morning and will significantly enhance our service body outfit capabilities. We have consistently discussed how well our specialty vehicles service body business has performed as we've executed our strategy to become a national market leader. This acquisition closely aligns with that strategy and I will provide additional details on strategic fit and the transaction on slide five. With the ITU acquisition, SHIFT adds three locations, a strong management team, and it enhances our updating capabilities as they specialize in larger vehicles and more complex service body updating than SHIFT has historically. The acquisition provides unique cross-selling opportunities for us where we can sell our Royal, Duramag, and Utilimaster products through ITU while also leveraging their upfitting capabilities and commercial relationships across shift. Overall, the combination of shift and ITU is powerful and well-aligned strategically. From a financial perspective, we view this as an attractive combination, meeting key return thresholds while maintaining balance sheet flexibility as we move forward. We are confident this transaction is an excellent strategic and financial opportunity for Shift, one that we believe will drive value creation as we continue to grow our infrastructure-related business. We look forward to working with the ITU team to integrate the business and deliver significant benefits for customers, team members, and shareholders. Now, let's turn to slide six, and I will provide an update around the status of the Blue Arc program. We have made great progress since launching Blue Arc back in 2021, and I'm happy to say, sitting here today, we are at an inflection point in the program. We are on the cusp of starting commercial vehicle production, and our focus is ensuring that we only put high-quality vehicles on the road. As we ramp, we have rigorous processes to support a well-disciplined vehicle launch. As we approach the delivery of our first vehicles, we are seeing increased customer interest. We're excited to announce the FedEx order earlier in the quarter, and we appreciate their partnership through the development process. We have recently completed additional demos providing end users the opportunity to experience the performance and quality of the Blue Arc vehicle. Customer feedback continues to give us confidence that we have the right vehicle for the market's needs. Turning to product development, testing and validation of the vehicle is now successfully completed. We recently celebrated the first production pilot vehicle built on our Charlotte, Michigan production line. a key milestone that validated our production and quality processes. We are pleased to report that the battery performance from our supplier continues to perform at our expectations. Overall, we're confident vehicle deliveries will begin later this year with a ramp-up in 2025. I am pleased by the incredible progress our team has made, and I look forward to providing further updates in the coming months I will now turn it over to John for a detailed review of our financial results in 2024 outlook.