SHYF

SHYFT GROUP INC

Industrials | Small Cap

$0.10

EPS Forecast

$209.9

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 ex_400405.htm EXHIBIT 99.1 ex_400405.htm

Exhibit 99.1

 

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41280 Bridge St, Novi, MI 48375

THESHYFTGROUP.COM

 

 

The Shyft Group Reports Second Quarter 2022 Results

 

Delivered $0.15 of EPS; Raised mid-point of outlook as chassis flow improved; Backlog remains strong; Continued progress on Blue Arc EV initiative

 

Novi, Mich., July 28, 2022 The Shyft Group, Inc. (NASDAQ: SHYF) (“Shyft” or the “Company”), the North American leader in specialty vehicle manufacturing, assembly and upfit for the commercial, retail and service specialty vehicle markets, today reported operating results for the second quarter ending June 30, 2022.

 

Second Quarter 2022 Financial Highlights from Continuing Operations1

 

For the second quarter of 2022 compared to the second quarter of 2021:

 

Sales of $232.2 million, a decrease of $11.8 million, or 4.8%, from $244.0 million.

Income from continuing operations of $5.3 million, or $0.15 per share, compared to income from continuing operations of $17.0 million, or $0.44 per share.

Adjusted EBITDA of $13.7 million, or 5.9% of sales, a decrease of $14.9 million, from $28.6 million, or 11.7% of sales. Results include $7.0 million of EV development costs.

Adjusted net income of $7.5 million, or $0.21 per share, compared to adjusted net income of $19.0 million, or $0.53 per share in the second quarter of 2021.

Consolidated backlog at June 30, 2022, totaled $1.1 billion, up $383.8 million, or 51.1%, compared to $751.4 million at June 30, 2021, reflecting continued strong demand across all business units.

 

“The Shyft Group continued to manage supply chain disruptions in the second quarter with results in line with our expectations. The Specialty Vehicles team executed well and produced solid results, while we also saw chassis deliveries in our Fleet Vehicle Services business improve steadily as the quarter progressed,” said Daryl Adams, President and Chief Executive Officer. “We also continued to hit key development milestones with our electrification products and remain on track for production in mid-2023.”

 

Fleet Vehicles and Services (FVS)

 

FVS segment sales were $136.9 million, a decrease of $24.7 million, or 15.3%, from $161.6 million due to decreased volume related in large part to reduced OEM chassis availability, partially offset by pricing actions.

 

Adjusted EBITDA was $14.5 million, or 10.6% of sales, compared to $28.1 million, or 17.4% of sales, a year ago. The decrease was primarily driven by lower volume and productivity inefficiencies as a result of intermittent chassis supply, material and labor cost inflation, partially offset by pricing actions and mix.

 

The segment backlog at June 30, 2022, totaled $1.0 billion and was up 53.2% compared to $652.6 million at June 30, 2021.

 

 


1 The Company divested its Emergency Response Vehicles (ERV) business effective February 1, 2020.  Accordingly, the financial results of ERV have been classified as discontinued operations for all periods presented. Unless otherwise noted, financial results presented are based on continuing operations. 

 

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The Shyft Group, Inc.

 

 

 

Specialty Vehicles (SV)

 

SV segment sales were $95.3 million, an increase of $12.9 million, or 15.7%, from $82.4 million a year ago. This was due to continued strong performance in luxury motorhome chassis and service body sales as well as the impact of pricing actions.

 

Adjusted EBITDA was $12.9 million, or 13.5% of sales, an increase of $4.1 million, or 46.0%, from $8.8 million, or 10.7% of sales, a year ago. The increase was primarily due to higher sales volume, pricing actions and improved product mix, partially offset by material and labor cost inflation.

 

The segment backlog as of June 30, 2022, totaled $135.2 million and was up 36.8% compared to $98.8 million at June 30, 2021.

 

2022 Outlook

 

“As anticipated, our second quarter started off slow, but progressively improved as OEM chassis deliveries increased throughout the quarter,” said Jon Douyard, Chief Financial Officer. “Given our second quarter performance, along with increased visibility into chassis supply, strong customer demand, and a healthy balance sheet, we believe that we are on track to deliver our improved full year guidance.”

 

Guidance for full-year 2022, notwithstanding further chassis and supply chain related issues, is as follows:

 

 

Revenue to be in the range of $925 million to $1.1 billion

 

Adjusted EBITDA of $55 to $80 million, including $30 million of expenses related to EV development

 

Income from continuing operations of $21 to $41 million

 

Earnings per share of $0.59 to $1.15

 

Adjusted earnings per share of $0.85 to $1.41

 

Adams concluded, “We remain excited about our long-term business prospects, our capabilities, and our team. Our financial strength positions us well to invest in innovation and meet the evolving needs of our customers despite the current industry wide challenges. The team is laser focused on executing our growth strategy and driving long-term value for customers, employees, and shareholders.”

 

Conference Call and Webcast Information

 

The Shyft Group will host a conference call at 10 a.m. ET today to discuss these results and current business trends. The conference call and webcast will be available via:

 

Webcast: www.the shyftgroup.com/webcasts

Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international); passcode: 10163194

 

For more information about Shyft, please visit www.theshyftgroup.com.

 

 

About The Shyft Group

 

The Shyft Group is the North American leader in specialty vehicle manufacturing, assembly, and upfit for the commercial, retail, and service specialty vehicle markets. Our customers include first-to-last mile delivery companies across vocations, federal, state, and local government entities; the trades; and utility and infrastructure segments. The Shyft Group is organized into two core business units: Shyft Fleet Vehicles & Services™ and Shyft Specialty Vehicles™. Today, its family of brands includes Blue Arc™ EV Solutions, Utilimaster®, Royal Truck Body™, DuraMag® and Magnum®, Strobes-R-Us™, Spartan RV Chassis™, Builtmore Contract Manufacturing™, and corresponding aftermarket provisions. The Shyft Group and its go-to-market brands are well known in their respective industries for quality, durability, and first-to-market innovation. The Company employs approximately 3,800 employees and contractors across campuses, and operates facilities in Michigan, Indiana, Maine, Pennsylvania, South Carolina, Florida, Missouri, California, Arizona, Texas, and Saltillo, Mexico. The Company reported sales of $992 million in 2021. Learn more about The Shyft Group at TheShyftGroup.com.

 

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The Shyft Group, Inc.

 

 

 

This release contains information, including our revenue and earnings guidance, all other information provided with respect to our outlook for 2022 and future periods, and other statements concerning our business, strategic position, financial projections, financial strength, future plans, objectives, and the performance of our products and operations that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using words such as believe, expect, intend, potential, future, may, will, should, and similar expressions or by using future dates in connection with any discussion of, among other things, the construction or operation of new or existing facilities, operating performance, trends, events or developments that we expect or anticipate will occur in the future, statements relating to volume changes, share of sales and earnings per share changes, anticipated cost savings, potential capital and operational cash improvements, anticipated disruptions to our operations and industry due to the COVID-19 pandemic, changes in supply and demand conditions and prices for our products, trade duties and other aspects of trade policy, statements regarding our future strategies, products and innovations, and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are not historical facts, but instead represent only the Companys beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Companys control. It is possible that the Companys actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Companys historical experience and our present expectations or projections. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Companys historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to the risks and uncertainties described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021, and those described from time to time in our future reports filed with the Securities and Exchange Commission (SEC), which are available at www.sec.gov or our website. All forward-looking statements in this release are qualified by this paragraph. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to publicly update or revise any forward-looking statements in this release, whether as a result of new information, future events, or otherwise.

 

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The Shyft Group, Inc.

 

 

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

   

June 30,

   

December 31,

 
   

2022

   

2021

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 6,607     $ 37,158  

Accounts receivable, less allowance of $162 and $187

    79,241       87,262  

Contract assets

    42,368       21,483  

Inventories, net

    102,010       67,184  

Other receivables - chassis pool agreements

    23,636       9,926  

Other current assets

    13,698       10,813  

Total current assets

    267,560       233,826  
                 

Property, plant and equipment, net

    66,169       61,057  

Right of use assets operating leases

    54,426       43,316  

Goodwill

    48,880       48,880  

Intangible assets, net

    51,029       52,981  

Net deferred tax asset

    5,312       4,880  

Other assets

    1,637       2,927  

TOTAL ASSETS

  $ 495,013     $ 447,867  

LIABILITIES AND SHAREHOLDERS' EQUITY

               

Current liabilities:

               

Accounts payable

  $ 90,259     $ 82,442  

Accrued warranty

    5,596       5,975  

Accrued compensation and related taxes

    12,918       19,064  

Contract liabilities

    1,359       988  

Operating lease liability

    9,706       7,934  

Other current liabilities and accrued expenses

    9,856       9,256  

Short-term debt - chassis pool agreements

    23,636       9,926  

Current portion of long-term debt

    192       252  

Total current liabilities

    153,522       135,837  
                 

Other non-current liabilities

    7,004       8,108  

Long-term operating lease liability

    46,188       36,329  

Long-term debt, less current portion

    55,263       738  

Total liabilities

    261,977       181,012  

Shareholders' equity:

               

Preferred stock, no par value: 2,000 shares authorized (none issued)

    -       -  

Common stock, no par value : 80,000 shares authorized; 35,063 and 35,416 outstanding

    88,894       95,375  

Retained earnings

    144,041       171,379  

Total The Shyft Group, Inc. shareholders' equity

    232,935       266,754  

Non-controlling interest

    101       101  

Total shareholders' equity

    233,036       266,855  

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

  $ 495,013     $ 447,867  

 

 

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The Shyft Group, Inc.

 

 

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

 
   

2022

   

2021

   

2022

   

2021

 

Sales

  $ 232,195     $ 243,982     $ 439,078     $ 441,870  

Cost of products sold

    190,077       192,076       371,029       349,978  

Gross profit

    42,118       51,906       68,049       91,892  
                                 

Operating expenses:

                               

Research and development

    7,563       940       12,490       1,722  

Selling, general and administrative

    26,860       28,740       53,412       53,277  

Total operating expenses

    34,423       29,680       65,902       54,999  
                                 

Operating income

    7,695       22,226       2,147       36,893  
                                 

Other income (expense):

                               

Interest expense

    (463 )     (227 )     (617 )     (57 )

Other income (expense)

    (488 )     506       (523 )     689  

Total other income (expense)

    (951 )     279       (1,140 )     632  

Income from continuing operations before income taxes

    6,744       22,505       1,007       37,525  
                                 

Income tax expense (benefit)

    1,461       5,552       (424 )     9,042  
                                 

Income from continuing operations

    5,283       16,953       1,431       28,483  
                                 

Income from discontinued operations, net of income taxes

    -       -       -       81  
                                 

Net income

    5,283       16,953       1,431       28,564  
                                 

Less: net income attributable to non-controlling interest

    -       990       -       1,025  
                                 

Net income attributable to The Shyft Group, Inc.

  $ 5,283     $ 15,963     $ 1,431     $ 27,539  
                                 

Basic earnings per share

                               

Continuing operations

  $ 0.15     $ 0.45     $ 0.04     $ 0.78  

Discontinued operations

    -       -       -       -  

Basic earnings per share

  $ 0.15     $ 0.45     $ 0.04     $ 0.78  
                                 

Diluted net earnings per share

                               

Continuing operations

  $ 0.15     $ 0.44     $ 0.04     $ 0.76  

Discontinued operations

    -       -       -       -  

Diluted earnings per share

  $ 0.15     $ 0.44     $ 0.04     $ 0.76  
                                 

Basic weighted average common shares outstanding

    35,049       35,333       35,078       35,322  
                                 

Diluted weighted average common shares outstanding

    35,243       36,190       35,437       36,191  

 

 

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The Shyft Group, Inc.

 

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands, except par value)

(Unaudited)

 

   

Six Months Ended June 30,

 
   

2022

   

2021

 

Cash flows from operating activities:

               

Net income

  $ 1,431     $ 28,564  

Adjustments to reconcile net income to net cash used in operating activities

               

Depreciation and amortization

    6,696       5,330  

Non-cash stock based compensation expense

    3,708       4,492  

Deferred income taxes

    (432

)

    134  

Loss (gain) on disposal of assets

    481       (105 )

Changes in accounts receivable and contract assets

    (12,863 )     (42,639 )

Changes in inventories

    (34,826 )     (21,992 )

Changes in accounts payable

    7,333       27,721  

Changes in accrued compensation and related taxes

    (6,146 )     665  

Changes in accrued warranty

    (379 )     989  

Changes in other assets and liabilities

    (1,672

)

    69  

Net cash provided by (used in) operating activities

    (36,669 )     3,228  
                 

Cash flows from investing activities:

               

Purchases of property, plant and equipment

    (10,010 )     (12,373 )

Proceeds from sale of property, plant and equipment

    148       15  

Acquisition of business, net of cash acquired

    -       404  

Net cash used in investing activities

    (9,862 )     (11,954 )
                 

Cash flows from financing activities:

               

Proceeds from long-term debt

    85,000       15,000  

Payments on long-term debt

    (30,000 )     (15,000

)

Payments of dividends

    (3,640 )     (1,776 )

Purchase and retirement of common stock

    (26,789 )     (3,348 )

Issuance and vesting of stock incentive awards

    (8,591

)

    (2,967

)

Net cash provided by (used in) financing activities

    15,980       (8,091 )
                 

Net decrease in cash and cash equivalents

    (30,551 )     (16,817 )

Cash and cash equivalents at beginning of year

    37,158       20,995  

Cash and cash equivalents at end of year

  $ 6,607     $ 4,178  

 

 

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The Shyft Group, Inc.

 

 

 

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Quarter Ended June 30, 2022 (in thousands of dollars)

 

   

Business Segments

         
   

Fleet Vehicles

   

Specialty

                 
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 126,181     $ -     $ -     $ 126,181  

Motorhome chassis sales

    -       42,710       -       42,710  

Other specialty vehicles sales

    -       47,044       -       47,044  

Aftermarket parts and accessories sales

    10,716       5,544       -       16,260  

Total Sales

  $ 136,897     $ 95,298     $ -     $ 232,195  
                                 

Adjusted EBITDA

  $ 14,525     $ 12,859     $ (13,695 )   $ 13,689  

 

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Quarter Ended June 30, 2021 (in thousands of dollars)

 

   

Business Segments

         
   

Fleet Vehicles

   

Specialty

                 
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 153,171     $ -     $ -     $ 153,171  

Motorhome chassis sales

    -       40,891       -       40,891  

Other specialty vehicles sales

    -       36,070       -       36,070  

Aftermarket parts and accessories sales

    8,447       5,403       -       13,850  

Total Sales

  $ 161,618     $ 82,364     $ -     $ 243,982  
                                 

Adjusted EBITDA

  $ 28,116     $ 8,808     $ (8,354 )   $ 28,570  

 

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Period End Backlog (amounts in thousands of dollars)

 

   

Jun. 30, 2022

   

Mar. 31, 2022

   

Dec. 31, 2021

   

Sept. 30, 2021

   

Jun. 30, 2021

 

Fleet Vehicles and Services

  $ 1,000,021     $ 1,148,700     $ 859,442     $ 749,731     $ 652,642  

Motorhome Chassis

    62,811       61,297       54,583       60,978       56,294  

Other Specialty Vehicles

    72,058       62,406       49,407       41,504       42,106  

Aftermarket Parts and Accessories

    293       296       127       347       382  

Total Specialty Vehicles

    135,162       123,999       104,117       102,829       98,782  
                                         

Total Backlog

  $ 1,135,183     $ 1,272,699     $ 963,559     $ 852,560     $ 751,424  

 

 

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The Shyft Group, Inc.

 

 

 

Reconciliation of Non-GAAP Financial Measures

 

This release presents Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted net income, and adjusted earnings per share, each of which is a non-GAAP financial measure. These non-GAAP measures are calculated by excluding items that we believe to be infrequent or not indicative of our underlying operating performance, as well as certain non-cash expenses. We define Adjusted EBITDA as income from continuing operations before interest, income taxes, depreciation and amortization, as adjusted to eliminate the impact of restructuring charges, acquisition related expenses and adjustments, non-cash stock-based compensation expenses, and other gains and losses not reflective of our ongoing operations.

 

We present the non-GAAP measure Adjusted EBITDA because we consider it to be an important supplemental measure of our performance. The presentation of Adjusted EBITDA enables investors to better understand our operations by removing items that we believe are not representative of our continuing operations and may distort our longer-term operating trends. We believe this measure to be useful to improve the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not indicative of our continuing operating performance. We believe that presenting this non-GAAP measure is useful to investors because it permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate our historical performance. We believe that the presentation of this non-GAAP measure, when considered together with the corresponding GAAP financial measures and the reconciliations to that measure, provides investors with additional understanding of the factors and trends affecting our business than could be obtained in the absence of this disclosure.

 

Our management uses Adjusted EBITDA to evaluate the performance of and allocate resources to our segments. Adjusted EBITDA is also used, along with other financial and non-financial measures, for purposes of determining annual incentive compensation for our management team and long-term incentive compensation for certain members of our management team.

 

 

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The Shyft Group, Inc.

 

 

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Financial Summary (Non-GAAP)

(In thousands, except per share data)

(Unaudited)

 

   

Three Months Ended June 30,

 

The Shyft Group, Inc.

 

2022

   

% of sales

   

2021

   

% of sales

 

Income from continuing operations

  $ 5,283       2.3 %   $ 16,953       6.9 %

Net (income) attributable to non-controlling interest

    -               (990 )        

Add (subtract):

                               

Restructuring and other related charges

    354               505          

Acquisition related expenses and adjustments

    341               71          

Non-cash stock-based compensation expense

    2,060               2,850          

Loss from liquidation of JV

    -               643          

Tax effect of adjustments

    (496 )             (998 )        

Adjusted net income

  $ 7,542       3.2 %   $ 19,034       7.8 %
                                 

Income from continuing operations

  $ 5,283       2.3 %   $ 16,953       6.9 %

Net (income) attributable to non-controlling interest

    -               (990 )        

Add (subtract):

                               

Depreciation and amortization

    3,727               2,759          

Income tax expense

    1,461               5,552          

Interest expense

    463               227          

EBITDA

  $ 10,934       4.7 %   $ 24,501       10.0 %

Add:

                               

Restructuring and other related charges

    354               505          

Acquisition related expenses and adjustments

    341               71          

Non-cash stock-based compensation expense

    2,060               2,850          

Loss from liquidation of JV

    -               643          

Adjusted EBITDA

  $ 13,689       5.9 %   $ 28,570       11.7 %
                                 

Diluted net earnings per share

  $ 0.15             $ 0.44          

Add (subtract):

                               

Restructuring and other related charges

    0.01               -          

Acquisition related expenses and adjustments

    0.01               -          

Non-cash stock-based compensation expense

    0.05               0.08          

Loss from liquidation of JV

    -               0.01          

Tax effect of adjustments

    (0.01 )             -          

Adjusted diluted net earnings per share

  $ 0.21             $ 0.53          

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Financial Summary (Non-GAAP)

(In thousands, except per share data)

(Unaudited)

 

   

Forecast

 
   

Twelve Months Ended December 31, 2022

 

The Shyft Group, Inc.

 

Low

   

Mid

   

High

 

Income from continuing operations

  $ 21,097     $ 31,116     $ 41,135  

Add:

                       

Depreciation and amortization

    13,582       13,582       13,582  

Interest expense

    1,500       1,250       1,000  

Taxes

    6,481       9,212       11,943  

EBITDA

  $ 42,660     $ 55,160     $ 67,660  

Add:

                       

Non-cash stock-based compensation and other charges

    12,340       12,340       12,340  

Adjusted EBITDA

  $ 55,000     $ 67,500     $ 80,000  
                         

Earnings per share

  $ 0.59     $ 0.87     $ 1.15  

Add:

                       

Non-cash stock-based compensation and other charges

    0.34       0.34       0.34  

Less tax effect of adjustments

    (0.08 )     (0.08 )     (0.08 )

Adjusted earnings per share

  $ 0.85     $ 1.13     $ 1.41  

 

 

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The Shyft Group, Inc.