The Shyft Group Reports Third Quarter 2024 Results
Expanded gross margin to 20.4%, up 210 basis points year-over-year
Blue Arc Class 4 vehicle now in production with first customer deliveries expected in the fourth quarter
Maintained full year 2024 adjusted EBITDA outlook of $45 to $50 million; positioned for significant profit growth in 2025
NOVI, Mich., Oct. 24, 2024 /PRNewswire/ -- 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 third quarter ending September 30, 2024.
Third Quarter 2024 Financial Highlights For the third quarter of 2024 compared to the third quarter of 2023:
Sales of $194.1 million, a decrease of $7.2 million, or 3.6%, from $201.3 million
Net income of $3.1 million, or $0.09 per share, compared to $4.5 million, or $0.13 per share; third quarter 2023 net income included a tax benefit of $2.0 million, primarily due to favorable adjustments for R&D tax credits
Adjusted EBITDA of $14.3 million, or 7.4% of sales, an increase of $3.3 million, from $11.0 million, or 5.5% of sales; results include $6.1 million of EV program related costs versus $7.6 million in the prior year
Adjusted net income of $6.1 million, or $0.18 per share, compared to $6.7 million, or $0.19 per share in the third quarter of 2023
Consolidated backlog1 of $345.4 million as of September 30, 2024, down $119.0 million, or 25.6%, compared to $464.4 million as of September 30, 2023
"We are improving performance by the execution of our operational framework as we achieved adjusted EBITDA growth of 31% year-over-year. The Shyft team is highly engaged in driving operational and commercial improvements and we are seeing it in our results," said John Dunn, President and CEO.
2024 Financial Outlook"In the quarter, Shyft delivered improved financial results while progressing key strategic initiatives, including the acquisition and initial integration of Independent Truck Upfitters. Our balance sheet remains solid as we achieved net leverage of 2.2x, which was meaningfully below our expectations for the third quarter. Based on our expected fourth quarter performance, we anticipate further improvement of our balance sheet and liquidity as we enter 2025, providing flexibility to invest capital going forward," said Jon Douyard, Chief Financial Officer.
Full-year 2024 outlook, notwithstanding further changes in the operating environment, is as follows:
Sales of approximately $800 million; Assumes no Blue Arc EV revenue
Adjusted EBITDA of $45 to $50 million, including EV spending of $20 to $25 million
Net income of $2.6 to $6.9 million, with an income tax rate of approximately 20%
Earnings per share of $0.07 to $0.20
Adjusted earnings per share of $0.35 to $0.50
Capital expenditures of $15 to $20 million
Free cash flow of approximately $30 million
Dunn concluded, "Our team is committed to meeting our financial goals for the year and maintaining financial strength heading into 2025. As we integrate ITU and start Blue Arc production, the team is energized by Shyft's future growth prospects and opportunities to deliver value through a one Shyft mindset. Overall, while the operating environment is highly dynamic, Shyft is well positioned to grow profitably as end-markets turn more positive."
Footnote: 1.) Consolidated backlog does not reflect Blue Arc order activity
Conference Call and Webcast InformationThe Shyft Group will host a conference call at 8:30 a.m. ET today to discuss these results and current business trends. The conference call and webcast will be available via:Webcast: https://theshyftgroup.com/investor-relations/webcasts/Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international)
About The Shyft GroupThe 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 and Services™ and Shyft Specialty Vehicles™. Today, its family of brands include Utilimaster®, Blue Arc™ EV Solutions, Royal® Truck Body, DuraMag® and Magnum®, Strobes-R-Us, Spartan® RV Chassis, Red Diamond™ Aftermarket Solutions, Builtmore Contract Manufacturing™, and Independent Truck Upfitters. 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 3,000 employees and contractors across campuses, and operates facilities in Arizona, California, Florida, Indiana, Iowa, Maine, Michigan, Missouri, Pennsylvania, Tennessee, Texas, and Saltillo, Mexico. The Company reported sales of $872 million in 2023. Learn more at TheShyftGroup.com.
This release contains information, including our sales and earnings guidance, all other information provided with respect to our outlook for 2024 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, 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 Company's beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's 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 Company's 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 Company's historical experience and our present expectations or projections. More information about factors that potentially could affect our financial results is included in our filings with the Securities and Exchange Commission ("SEC"), including our most recent Annual Report on Form 10-K and subsequent filings, 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.
CONTACTSMEDIASydney MacheskyDirector, Corporate
INVESTORSRandy Wilson Vice President, Investor Relations and Treasury
The Shyft Group, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$ 21,440
$ 9,957
Accounts receivable, less allowance of $496 and $276
99,255
79,573
Contract assets
32,237
50,305
Inventories
108,931
105,135
Other receivables - chassis pool agreements
31,592
34,496
Other current assets
6,364
7,462
Total current assets
299,819
286,928
Property, plant and equipment, net
83,773
83,437
Right of use assets, operating leases
40,524
45,827
Goodwill
64,902
48,880
Intangible assets, net
60,724
45,268
Net deferred tax asset
17,310
17,300
Other assets
2,382
2,409
TOTAL ASSETS
$ 569,434
$ 530,049
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 80,697
$ 99,855
Accrued warranty
8,827
7,231
Accrued compensation and related taxes
17,204
13,526
Contract liabilities
6,024
4,756
Operating lease liability
9,881
10,817
Other current liabilities and accrued expenses
10,659
11,965
Short-term debt - chassis pool agreements
31,592
34,496
Current portion of long-term debt
248
185
Total current liabilities
165,132
182,831
Other non-current liabilities
9,028
8,184
Long-term operating lease liability
32,377
36,724
Long-term debt, less current portion
110,234
50,144
Total liabilities
316,771
277,883
Shareholders' equity:
Preferred stock, no par value: 2,000 shares authorized (none issued)
-
-
Common stock, no par value : 80,000 shares authorized; 34,482 and34,303 outstanding
98,888
93,705
Retained earnings
153,775
158,461
Total shareholders' equity
252,663
252,166
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 569,434
$ 530,049
The Shyft Group, Inc. and SubsidiariesConsolidated Statements of Operations(In thousands, except per share data)(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Sales
$
194,075
$
201,325
$
584,744
$
669,865
Cost of products sold
154,468
164,557
470,488
547,419
Gross profit
39,607
36,768
114,256
122,446
Operating expenses:
Research and development
4,200
5,225
12,425
18,064
Selling, general and administrative
30,078
27,419
94,704
89,978
Total operating expenses
34,278
32,644
107,129
108,042
Operating income
5,329
4,124
7,127
14,404
