Q4 2024 The Shyft Group Inc Earnings Call

Good morning and welcome to the shift Group's 4th quarter and full year 2024 conference call and webcast. All participants will be enlisted only mode until the question and answer session of the conference call.

Operator: Good morning and welcome to the Shyft Group's fourth quarter and full year 2024 conference call and webcast. All participants will be in listen-only mode until the question and answer session of the conference call. As a reminder, this call is being recorded.

As a reminder, this call is being recorded. I would now like to introduce Randy Wilson, vice president and investor of investor relations and treasury for the shift group. Please go ahead.

Randy Wilson: I would now like to introduce Randy Wilson, Vice President of Investor Relations and Treasury for the Shyft Group.

Randy Wilson: Please go ahead.

Good morning and thank you for joining us.

Randy Wilson: Good morning, and thank you for joining us. Today you will hear from John Dunn, President and Chief Executive Officer, and Scott Ohalik, Interim Chief Financial Officer. Their prepared remarks will be followed by a question and answer session.

Speaker Change: Today you will hear from John Dunne, president and chief executive officer, and Scott O'Halli, interim chief financial officer.

Speaker Change: Their prepared marks will be followed by a question and answer session.

Randy Wilson: Before I begin, please turn to slides 2 and 3 of the presentation for a Safe Harbor Statement. Today's conference call contains forward-looking statements which are subject to risks that could cause actual results to be entirely 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-GAP measures can be found in the conference call materials.

Speaker Change: I begin to slides 2 and 3 of the presentation for Safe Harbor statement.

Speaker Change: Today's conference call contains forward looking statements which are subject to risk that could cause actual results to be entirely different from those expressed or implied.

Speaker Change: Primary risk that man believes could materially affect the results are identified in our forums 10K and 10Q filed with the SEC.

Speaker Change: We'll be discussing non-GAAP information and performance measures which we believe are useful in evaluating the company's operating performance.

Speaker Change: Reconciliations for these non-GAAP measures can be found in the conference call materials.

Speaker Change: We all begin with a business overview from John, followed by Scott's review of 4th quarter financial results in our 2025 outlook.

Randy Wilson: We'll begin with a business overview from John, followed by Scott's review of fourth quarter financial results and our 2025 outlook.

Speaker Change: John will finish up our presentation with an update on our pending merger with Abby Schmidt.

Randy Wilson: John will finish up our presentation with an update on our pending merger with Abby Schmidt. We'll then open the line for Q&A.

Speaker Change: We'll then open the line for Q&A.

Speaker Change: Please turn a slide forward and I'll turn it over to John who'll begin today's prepared remarks.

Randy Wilson: Please turn the slide forward, and I'll turn it over to John, who will begin today's prepared remarks.

John Dunne: Thank you, Randy, and good morning.

John Dunn: Thank you, Randy, and good morning. Welcome to our earnings call, and we appreciate your interest in the Shyft Group.

John Dunne: Welcome to our earnings call, and we appreciate your interest in the shift group.

John Dunne: 2024 was an incredible year for our company.

John Dunn: 2024 was an incredible year for our company. We made significant strides in advancing our strategy, delivered operational improvements, and achieved solid financial performance.

John Dunne: We made significant strides in advancing our strategy.

John Dunne: Delivered operational improvements and achieved solid financial performance.

John Dunne: In December we announced a powerful next step in ship's journey.

John Dunn: In December, we announced a powerful next step in Shyft's journey. Our proposed merger with Abbey Schmidt, a leading global specialty vehicles company. Together, we will create a highly competitive specialty vehicles leader with enhanced scale, capabilities and expertise and deeper customer relationships as we combine the strengths of both companies.

John Dunne: Our proposed merger with Abby Schmidt, a leading global specialty vehicles company.

John Dunne: Together we will create a highly competitive specialty vehicles leader with enhanced scale.

John Dunne: Capabilities and expertise and deeper customer relationships as we combine the strengths of both companies.

Speaker Change: Let's kick off this morning with some highlights from the past year at the ship group.

John Dunn: Let's kick off this morning with some highlights from the past year at the Shyft Group. The Talented SHIFT team has been highly engaged in implementing operational and commercial improvements throughout 2024, and we are seeing improved results. We consistently improved our financial performance. driven by our intense focus on increasing operational and organizational efficiencies across our company. By leveraging a one-shift mindset, we are streamlining our corporate structure and managing costs to deliver margin improvement. These efforts resulted in meaningful adjusted EBITDA growth for the company with margins of 6.2%. up 160 basis points year over year. Despite a soft parcel market, our fleet, vehicles, and services business expanded margins to 7.2 percent, up 160 basis points year over year by driving operational performance.

Speaker Change: The talented ship team has been highly engaged in implementing operational and commercial improvements throughout 2024, and we are seeing improved results.

Speaker Change: We consistently improved our financial performance.

Driven by our intense focus on increasing operational and organizational efficiencies across our company.

Speaker Change: By leveraging a one shift mindset, we are streamlining our corporate structure and managing costs to deliver margin improvement.

Speaker Change: These efforts resulted in meaningful adjusted evenbita growth for the company, with margins of 6.2%.

Speaker Change: up 160 basis points year over year.

Speaker Change: Despite a soft parcel market, our fleet vehicles and services business expanded margins to 7.2%.

Speaker Change: Up 160 basis points year over year by driving operational performance.

Speaker Change: This is a testament to our team's strategic approach to controlling what they can control.

John Dunn: This is a testament to our team's strategic approach to controlling what they can control. Specialty vehicles continued strong even to margins, were supported by focused execution and steady demand for infrastructure truck bodies.

Speaker Change: Specialty vehicles continued strong, even a margins were supported by focused execution and steady demand for infrastructure, trucks, bodies.

Speaker Change: Our balance sheet remains solid, with net leverage less than 2 times.

John Dunn: Our balance sheet remains solid, with net leverage less than two times, allowing us the flexibility to invest in strategic initiatives that support our growth going forward. This financial strength enables us to capture new opportunities and drive long-term success.

Speaker Change: Allowing us the flexibility to invest in strategic initiatives that support our growth going forward.

Speaker Change: This financial strength enables us to capture new opportunities and drive long-term success.

Speaker Change: Finally, we are pleased to bring Blue Art to production as we successfully shift.

John Dunn: Finally, we are pleased to bring Blue Art to production as we successfully shift EV trucks to FedEx. which is an exciting milestone for our entire Shyft team. This achievement underscores our commitment to meeting the complex needs of our fleet partners and serving as their partner of choice as they transition to more sustainable fleet operations.

Speaker Change: EV trucks to FedEx.

Speaker Change: Which is an exciting milestone for our entire shift team.

Speaker Change: This achievement underscores our commitment to meeting the complex needs of our fleet partners and serving as their partner of choice as a transition to more sustainable fleet operations.

Speaker Change: Turning to slide 5.

John Dunn: Turning to slide 5, we outline our operating framework, which has guided Shyft in 2024 as we drove improvements across our business. strengthening talent, improving leadership training, and ensuring safety with our Mission Zero initiative, we reduced workplace injuries by 40% in 2024. Lean Manufacturing and Efficiency Initiatives Lowered Cost and Improved Competitiveness in the Market.

Speaker Change: We outline our operating framework.

Speaker Change: Which is guided shift in 2024 as we drove improvements across our business.

Speaker Change: Strengthening talent.

Speaker Change: Improving leadership training and ensuring safety with our Mission Zero initiative, we reduced workplace injuries by 40% in 2024.

Speaker Change: Lien manufacturing and efficiency initiatives lowered costs and improved competitiveness in the market.

John Dunn: In summary, we are proud of the work we have done this year, and I would like to thank our team. Without their dedication and skill sets, our accomplishments would not be possible.

Speaker Change: In summary, we are proud of the work we have done this year, and I would like to thank our team.

Speaker Change: Without their dedication and skill sets are accomplishments would not be possible.

Speaker Change: I would now like to welcome Scott O' Hollick to his first shift earnings call.

Scott Ohalik: I would now like to welcome Scott O'Hollick to his first SHIFT earnings call. and he will provide a detailed review of our financial results and 2025 outlook.

Speaker Change: And he will provide a detailed review of our financial results in 2025 outlook.

Speaker Change: Thank you, John. First, I'd like to take a moment to introduce myself. I have been with Shift for over 5 years, serving as the company's chief accounting officer in corporate controller. I have over 25 years of experience in the global automotive supply and specialty vehicle markets and I'm very excited to have the opportunity to be the interim CFO here at Shift.

Scott Ohalik: Thank you, John.

Scott Ohalik: First, I'd like to take a moment to introduce myself. I have been with Shyft for over five years, serving as the company's chief accounting officer and corporate controller. I have over 25 years of experience in the global automotive supply and specialty vehicle markets, and I'm very excited to have the opportunity to be the interim CFO here at Shyft. I look forward to meeting many of you over the next several weeks.

Speaker Change: I look forward to meeting many of you over the next several weeks.

Speaker Change: With that said, please turn to slide 7, and I will start with an overview of our 4th quarter financial results.

Scott Ohalik: With that said, please turn to slide seven and I will start with an overview of our fourth quarter financial results. Overall, our team delivered meaningful improvement and profitability in the fourth quarter. Sales for the quarter were $201.4 million, down slightly from $202.3 million in the prior year. Our gap net loss was $3.4 million, or $0.10 per share, compared to a net loss of $4.4 million, or $0.13 per share, in the previous year. The net loss for the quarter was negatively impacted by $8.5 million of transaction costs related to the pending merger with Abby Schmidt. On an adjusted basis, EBITDA was $15.9 million for the quarter, or 7.9% of sales, up from $2.3 million, or 1.1% of sales, in the fourth quarter of 2023.

Speaker Change: Overall our team delivered meaningful improvement in profitability in the 4th.

Scott Ohalik: These results include a $5.8 million of EV spend. which is down from 9.3 million in the prior year. Adjusted net income for the quarter was $5 million and adjusted EPS increased to $0.15 per share compared to a loss of $900,000 or a negative $0.03 per share in the fourth quarter of 2023.

Scott Ohalik: Please turn to slide 8, and I will walk through our results by operating segment. In the quarter, our fleet vehicles and service segment achieved sales of $110.7 million, down 7% compared to $119 million a year ago, reflecting continued softness in walk-in vans offset by higher volumes in heavy upfront. Adjusted EBITDA for the quarter was $12.1 million versus a loss of $2.6 million a year ago with higher productivity offset by lower volume. Adjusted EBITDA margin improved to 10.9% of sales compared to a negative 2.2% in the fourth quarter of last year. This margin improvement speaks to the strength of our team and the operational achievements made throughout the year, despite the continued challenging environment for parcel demand.

Scott Ohalik: FVS backlog was $244.8 million at year-end, down 24.7% versus 2023, reflecting continued softness in parcel, but on a positive note, we did achieve market share gains in our walk-in van product line during these challenging times.

Scott Ohalik: Turning to the Special Vehicles segment, our team closed out 2024 with profitability in line with the prior year, as our infrastructure-focused vocational truck businesses delivered solid results, offsetting the ongoing market weakness in motorhomes. Fourth quarter sales were $87.5 million, a 5% increase from $83.4 million in the prior year. Adjusted EBITDA was $16.6 million, or 19% of sales, compared to $19 million, or 22.8% of sales in the same period last year. His strong overall profitability was driven by the steady demand for infrastructure-related vocational trucks. SV backlog was $68.5 million at the end of the year, down 18.8% versus 2023.

Scott Ohalik: This was driven primarily by a decrease in motorhome orders.

Scott Ohalik: Please turn to slide 9 for our 2025 Outlook. With our improved financial results and continued margin expansion this quarter, we are poised to continue this momentum into 2025. Our focus remains on driving growth and profitability improvement. We do, however, remain cautious as we enter 2025 on near-term demand for parcel and motorhome vehicles as we expect the softness to persist through mid-year. We do anticipate a modest recovery in both the parcel and motorhome markets in the second half of the year. While continuing to be strong, we are also closely monitoring infrastructure spend and the potential impacts it may have on our vocational truck business.

Scott Ohalik: We expect year-over-year growth as Blue Arc production is underway and will reach near break-even profitability for the full year.

Scott Ohalik: Given these factors, and notwithstanding further changes in the operating environment, we are introducing our 2025 outlook as follows. We expect sales to be in the range of $870 to $970 million. This includes approximately $50 million related to BlueArk. Full Year Adjusted EBITDA in the range of $62 to $72 million. Consistent with historical patterns and seasonality, we expect a slow start to the year and anticipate the first quarter adjusted EBIDTA to be in the low single digits. As we see a second half recovery in our markets, we expect around 70% of full year adjusted EBITDA to be delivered in the second half of the year.

Scott Ohalik: We expect adjusted EPS in the range of $0.69 to $0.92 per share and free cash flow of $25 to $30 million, up meaningfully on a year-over-year basis. This includes approximately $20 million of transaction-related cash expected to be paid during the year. We remain committed to driving further improvements in our financial performance as our end markets recover and we finalize the proposed merger with Abby Schmidt.

John Dunn: With that, I will turn it back over to John to provide an update on the merger. Thanks, Scott, and please turn to slide 11. This proposed merger with Abby Schmidt presents a compelling opportunity for our shareholders, customers, and employees. By bringing our businesses together, we are creating a differentiated leader in the specialty vehicles space with a robust presence in the North American market, where approximately 75 percent of our revenues will be generated. This strategic move positions us to capture growth opportunities in high margin end markets, including commercial infrastructure. For our customers, the merger will provide a highly complimentary and expanded suite of products and services driven by our unwavering focus on customer-centric innovation and deep customer relationships.

John Dunn: For shareholders, the combined company will have a stronger financial profile and will drive value by capitalizing on synergies, expanding our product offerings, and leveraging our team's expertise. Our people share a common commitment to operational excellence, customer focus, and innovation, making us confident in our collective success. We believe this merger is in the best interest of our shareholders, customers, and team members.

John Dunn: Now, turn to slide 12, and I will discuss the integration work, which is well underway. Since announcing the transaction, we've made solid progress towards completing the actions needed to close. In January, we provided data reinforcing the merger's value creation potential, including additional information on Abby Schmidt's strong financial projections and market leadership. We achieved HSR antitrust approval and are making progress in other regulatory and closing conditions. We are leveraging both Shyft and Abby Schmidt's strong track records of successfully integrating businesses and have established a joint integration team. Overall, the steps we are taking are preparing our two companies to integrate seamlessly, and I look forward to providing more updates as we progress towards closing.

John Dunn: which we expect by mid 2025. We are diligently working on integrating our businesses to capture the full potential of the combined company and deliver enhanced value for our shareholders on day one.

Operator: We are now ready to take your questions. Operator, please open the line. We will open up the lines for questions in a moment, please bear with me.

Operator: Matt, you're live. Operator, if you can please have Matt go live, please.

Matt: Hey guys, I can hear you. Can you hear me okay? Great. Thank you.

Operator: You're good, Matt. Thank you.

Matt: Technical difficulties this morning, but appreciate your patience. Yeah. Sorry, I didn't hear my cue there. That's okay.

Matt: Also, I wanted to talk about the 2025 outlook with respect to Blue Arc. It sounds like you guys, I think I heard correctly in the prepared remarks. 50 million in sales embedded in the guide, and you should approach breakeven on EBITDA this year. Just wanted to hear you talk about, do you have all orders in hand? Deliver on the $50 million. Maybe just talk about the cadence of delivery this year. Any progress update on sort of the vehicles in the field with FedEx? or other customers. We'll love to hear a little bit more color on the program.

John Dunn: Great, Matt.

John Dunn: This is John. Give me an update on that. So, we are in the production phase running vehicles. A couple a day are coming off the line to fulfill our contract with FedEx. That was for 150 orders. So, we're working through that order right now. The vehicles in the field continue to perform well and meet expectations. In addition to FedEx, we have demos running with a couple other key customers. one of them up in Canada, so experiencing the cold climate running, performing well, meeting all our expectations. So we're excited about the performance of the vehicle and getting it to the phase now where we can give it to customers to really use it.

John Dunn: FedEx is deploying the vehicles we're making and continue to be very positive on it. If you're at LAX, for example, there's a couple out there right now in service.

John Dunn: From an order standpoint, it is a dynamic market right now, as people are sorting out what to do on the EV. Fortunately, though, we see a lot of commitment from our key partners. The bigger fleets are still leaning into starting to transition to that more environmentally friendly solution of EVs. And from an order standpoint, we're seeing a lot of activity, confident that it will continue to materialize. The big enabler here is to get these vehicles out on the road and people really see how well they work. And so the more vehicles on the road we have, the more positive experiences people have, the expectation is that we'll continue to lead to more orders.

Matt: Okay, but in terms of the orders you have in hand, do you have enough to fulfill the $50 million without incremental orders this year?

John Dunn: Now, we need additional orders, and that's an area where Scott mentioned as well, we're striving to get to that breakeven. To do that, we need to be, we can do it at under 500 orders, and we're not there yet.

Matt: We're hoping to have another announcement shortly. could have been short of the full amount needed. Okay, all right, understood.

Matt: Thanks. Okay, and then on the fleet vehicle segment, just wanted to hear a little bit more about the, you know, what's embedded in the Outlook for 25. It sounds like you're assuming. Parcel demand recovery in the back half of this year. I know that's kind of come in fits and starts in terms of the prediction of recovery in that market.

John Dunn: Maybe just talk about what gives you confidence that we're going to see a recovery in the parcel fleet demand this year. What are you hearing from customers, fleets in particular? We'd love to hear an update on FPS. You know, we're staying very close with those key parcel customers, making sure we understand exactly their needs and their plans. The good news is they're not changing the concept on how they're delivering parcel packages to homes, so they still want these large vehicles that we make, so it's right in the wheelhouse. Because these vehicles are so robust, they're able to maintain them and kind of push it down some of those purchases or push out some of those purchases slightly.

John Dunn: But what we see is they've been pushing that out for about two years now. Eventually, there's going to need to be a replacement cycle that kicks in, and it should be a nice one kicking in. It's just a matter of when. We're not seeing it yet, so that's why we're guiding and saying we'll be seeing it in the second half of the year. But we're having good conversations with the customers to understand when is that going to happen, and there's indication it's going to happen in that second half of this year. I got it.

Matt: And then just on Specialty Vehicle, and then I'll turn it over to someone else. I guess the implied order flow was a little soft in Specialty Vehicle. Could you just speak to sort of what's driving that? Is that still motorhome that's driving the bulk of the weakness in the implied order flow that you're getting in that segment? What are you seeing on sort of the core work truck piece of the business? Maybe if you just unpack the order trends at Specialty Vehicle, it'd be helpful.

Scott Ohalik: Yeah, Matt, this is Scott. Thanks for the question. You know, you're right, we're continuing to see the weakness in the motorhome market that's really, you know, driving the weakness there on that side of things on the work truck side of our business, we're actually starting, you know, it's been very steady, we're continuing to see strong orders there. And especially here in the first part of 2025, we're continuing to see strong orders. So, so we're, we're expecting that to continue to be steady into 2025. So that's the main thing. On the Motorhome side, you know, the dealers, their inventories are at pre-pandemic levels now, lower than pre-pandemic levels.

Matt: So I think they've got their inventories in place and now they're, you know, I think just being a little more thoughtful on their planning on their inventory. So, but we do anticipate the orders to pick up here as we move into the second half of the year on Motorhome as well. Okay, got it.

Matt: I'll turn it over to someone else. Thanks. Thanks, Matt.

Operator: Great, thank you.

Mike Shlisky: The next question is from Mike Shlisky with D.A. Davidson, please go ahead.

Mike Shlisky: Yes, hi there. Good morning. Thank you for taking my question. Um, I want to start off, if you have comments... Good morning, guys. Good morning. Your comments were about one of the drivers of growth. bettertrends25, sounds like it's infrastructure.

John Dunn: If you're expecting to see some growth in infrastructure in 2025 at Shyft Group, would it be fair to say that, from what you know, that Avi Schmidt will be growing its overall business as fast or faster than Shyft Group, given their greater focus on infrastructure in their mix? I think that's it. Thanks for the question. And I think that's one of the the key aspects of this merger, bringing Abhi Schmidt together with the Shyft Group. We do have that upfit business infrastructure based that we can really coordinate our activities, have a better footprint nationwide and access to a broader range of customers.

John Dunn: So we see that's one of the key points that's going to accelerate our growth.

John Dunn: As to the specifics on what they're seeing right now, because we're still in the early phase of the merger, we're not really sharing that information. But we know that they have to be seeing similar activity and growth.

Scott Ohalik: Also, I just want to talk about the FBS margin results in the quarter. Pretty good swing there. We're talking, you know, 14, 15 points from a negative to a positive over the prior year in the fourth quarter. How sustainable is that, is that like 11 percent? margin run rate at $110 million in sales. Is that on the curve of where FTS is currently running? Yeah, I think, you know, we're certainly seeing improvements in the FPS margins, you know, we had some great operational efficiencies that we drove. So that's what you're seeing year over year to get to the low double digit margins.

Scott Ohalik: And I think that's also consistent with where we've talked about, you know, getting those margins over the last several quarters. So, so, yeah, so we do expect to be able to, to maintain that low double digits in that space. And again, it's really high focus on operational efficiencies in that space. It's helped us get there.

Mike Shlisky: Got it.

Mike Shlisky: Maybe one last one for me. Thank you, Mike. Thanks.

Mike Shlisky: Oh, I have one other question. Oh, go ahead, Mike. Oh, sure. I just wanted to ask about tariffing. Oh, yeah. We are. Yep.

Scott Ohalik: Yeah, I wanted to ask you a little bit about what we should be thinking about at this stage as far as tariffs. I know it's still a bit of a fluid situation, but there are some aluminum tariffs out there. Do you have surcharges planned or any other potential changes to your pricing, and are there still kind of... There's some kind of more flexible pricing arrangement as the tariff situation changes here in the first part of 2025 that might impact your business.

Scott Ohalik: Yeah, I'm like, this is Scott. Let me start off there. So, yeah, certainly, you know, we've been evaluating the various scenarios relating to the tariffs and of what's been put in place and, you know, the multiple other threats that that are still out there. You know, we implemented a supply chain strategy over the last couple of years that are really focused on helping us mitigate this risk. It includes the strategy of North American supply alternatives, right? So we do have plans in place to mitigate the impact both through our partnerships with our suppliers, as well as plans to increase prices where appropriate to help offset these impacts.

Scott Ohalik: But it is a very fluid situation. So we're watching it very closely to be able to understand these impacts, but it is a little early as things are continuing to move quickly day to day.

Tyler DiMatteo: The next question is from Tyler DiMatteo with BTG. Please go ahead.

Tyler DiMatteo: Hey, guys. Morning. Thanks for taking the question. Appreciate the time. I wanted to follow up on the outlook for this year. I wanted to follow up real quick on the outlook here. I know the comments surrounding seasonality in the Q1. I guess what's maybe the magnitude of that? I mean, is it going to be similar to past? I know you kind of pointed to that, hey, low single-digit EBITDA and then 70% in the back half of the year. I guess I'm just curious, you know, the degree of the seasonality and then I'll follow up. Sure.

Scott Ohalik: Yeah, I think it's going to be consistent with the prior year. So, if you look at 2024, we had a similar slow start to ramping up and a much stronger second half of the year. We're expecting that similar type of progression here this year. We do expect the benefit of our ITU acquisition as well as just the continued strength of the work truck space. We have talked about the fact that Blue Arc has moved into production now, which is going to help us from an overall cost spend perspective. But in this first quarter specifically, we are still seeing the weakness in the walk-in van and the motorhome space, which is going to be a challenge for us this quarter.

Scott Ohalik: And I think while you're seeing that, that comment on the single digit, low single digits in Q1. Got it.

Tyler DiMatteo: Thank you. And then my follow-up here, really surrounding maybe the service work and the outfitting pieces of business versus the, you know, the core product, if you will. I guess, in terms of the service piece and the infrastructure, I guess, how has the approach to kind of service work from you guys and maybe going to customers, how has that strategy evolved as you go to win, you know, orders? I know, obviously, from a profitability perspective, you guys have done a really nice job of keeping that margin profile. But I guess, as you think about your strategy and kind of how has that evolved over time?

John Dunn: And I guess maybe how much is it the same? How do you kind of think about that in terms of 2025? And specifically around those service bodies, our strategy continues to be to get that nationwide coverage. And so as the Royal is much more on the West Coast, Duramag and aluminum is on the East Coast. We're bringing that together. You see that in our new Nashville area facility where we sell both products there. And so it's getting that nationwide coverage. And then through our new partners, ITU, for example, they now use either a Royal or Duramag.

Tyler DiMatteo: Service Body. So we're more vertically integrated there. And as we roll into the merger with Abe Schmidt, there's just more opportunities there to get that vertical integration, really drive the overall sales of the service body business. So that's one of the key pieces that makes us excited about it. And in that merger, we've identified synergies. A lot of that synergies and opportunities is coming together in that space for the outfit. of Business. Supporting Infrastructure. Awesome. Thanks, guys. Appreciate the time.

Operator: I'll turn it back to the queue.

Operator: Thanks, Tyler.

Randy Wilson: This concludes the question and answer session. Mr. Wilson, I would like to turn the floor back over to you for closing comments. Thank you, Operator. I'd like to thank everyone for joining today's call. Manfred looks forward to connecting with the investment community at the NTA Work Truck Week on March 5th and 6th in Indianapolis and at the Roth Conference in Dana Point, California on March 16th and 17th. As always, thank you for your interest in the Shyft Group, and please reach out to me if you have any follow-up questions.

Operator: With that, Operator, please disconnect the call.

Operator: The conference has been concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.