NOVI — Officials with specialty vehicle manufacturer The Shyft Group Inc. say they are making progress on their electric vehicle chassis design while eyeing organic growth and more acquisitions in the coming years.
Six months after launching a strategic electric vehicle chassis initiative for medium-duty vehicles, The Shyft Group (Nasdaq: SHYF) expects to move to prototypes over the next year before starting production in 2023.
“What we struggled with over the past 18 months was trying to find a chassis that would meet our customers’ needs and demands,” President and CEO Daryl Adams said in a conference call today.
While he called chassis-building “second nature” to the company that has specialized in it for decades, The Shyft Group lacked the in-house computer programming to support a variety of electric light- and medium-duty vehicles, he said.
The company announced its strategic EV chassis development initiative in June, and opened a research and development center in Wayne County in September. Adams said some proof of concepts are currently being built, and the company expects to have three complete chassis built by early March 2022.
“That’s less than nine months from having zero to having vehicles ready to go and a proof of concept,” he said.
The company expects to be building prototypes in the second half of next year before starting production in 2023, Adams added.
The EV chassis is designed to service a variety of truck applications, including last-mile parcel delivery fleets, work trucks, passenger buses and recreational vehicles.
Company executives held the media roundtable today to highlight recent growth for The Shyft Group, and its subsidiaries, which include Shyft Fleet Vehicles and Services, Shyft Innovations and Shyft Specialty Vehicles.
Headquartered in Novi, The Shyft Group maintains a large presence in Charlotte, where the company was formerly based as Spartan Motors Inc. The company designs, engineers, manufactures and services purpose-built speciality vehicles and chassis for a variety of applications.
When Adams took over as CEO of Spartan Motors in 2015, the company had $550 million in sales, a $105 million market cap, and a share price of $3.11. Last year, the company divested from its emergency response vehicle division in a deal that also sent its company name to the buyer.
As of Nov. 8 of this year, the company reported $950 million in sales, a $1.8 billion market cap, and a share price of $50.14. Those figures came two weeks after the company’s Utilimaster brand inked a $53 million contract with the United States Postal Service for 447 dry freight truck bodies.
Adams said the company’s four objectives are organic growth, “operational excellence,” strategic acquisitions and product innovations.
Four acquisitions in recent years — including DuraMag in 2020 and General Truck Body and Royal Truck Body in 2019 — have expanded the company’s footprint to eight additional states outside of Michigan and Indiana.
The company’s 2025 financial objectives include $1.75 billion in revenue and an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 15 percent.
In that time, Adams called M&A a “big opportunity,” adding that the company has updated bank agreements with $400 million available for deals.
“We think there will be opportunity in 2022 as companies continue to struggle with COVID,” Adams said.