The Shyft Group Reports First Quarter 2024 Results
-
First quarter sales of
$198 million ; Quarter end consolidated backlog of$439 million with FVS backlog up 10% sequentially -
Maintains 2024 outlook with sales of
$850 to$900 million and adjusted EBITDA of$40 to$50 million
First Quarter 2024 Financial Highlights
For the first quarter of 2024 compared to the first quarter of 2023:
- Sales of
$197.9 million , a decrease of$45.5 million , or 18.7%, from$243.4 million - Net loss of
$4.7 million , or ($0.14 ) per share, compared to net income of$1.7 million , or$0.05 per share - Adjusted EBITDA of
$6.1 million , or 3.1% of sales, a decrease of$4.7 million , from$10.8 million , or 4.4% of sales; Results include$5.5 million of EV program related costs versus$8.5 million in the prior year - Adjusted net loss of
$1.4 million , or ($0.04 ) per share, compared to adjusted net income of$4.3 million , or$0.12 per share in the first quarter of 2023 - Consolidated backlog of
$439.4 million as ofMarch 31, 2024 , down$228.0 million , or 34.2%, compared to$667.4 million as ofMarch 31, 2023 ; On a sequential quarter basis, consolidated backlog was up 7.4%
"We made progress implementing our operating framework, which includes high performing teams, operational excellence, and customer centricity," said
First Quarter 2024 Business Segment Financial Highlights
For the first quarter of 2024 compared to the first quarter of 2023:
Fleet Vehicles and Services (FVS)
- Sales were
$107.8 million for the first quarter of 2024, down 32.4%, or$51.6 million year over year - Adjusted EBITDA for the first quarter of 2024 was
$0.9 million , or 0.9% of sales, a decrease of$11.6 million , from$12.5 million , or 7.8% of sales, a year ago - Segment backlog was
$356.1 million as ofMarch 31, 2024 , down 39.1% compared to$584.9 million as ofMarch 31, 2023
Specialty Vehicles (SV)
- Sales were
$90.1 million for the first quarter of 2024, up 3.4%, or$2.9 million year over year - Adjusted EBITDA for the first quarter of 2024 was
$17.0 million , or 18.8% of sales, an increase of$3.1 million , from$13.9 million , or 15.9% of sales, a year ago - Segment backlog was
$83.3 million as ofMarch 31, 2024 , up 1.0% compared to$82.5 million as ofMarch 31, 2023
2024 Financial Outlook
"We are pleased with our start to the year considering the challenging end-markets," said
Guidance for full-year 2024, notwithstanding further changes in the operating environment, is as follows:
- Sales to be in the range of
$850 million to$900 million ; Assumes no Blue Arc EV revenue - Adjusted EBITDA of
$40 to$50 million , including EV spending of$20 to$25 million - Net income of
$2.5 to$10.5 million , with an income tax rate of approximately 20% - Earnings per share of
$0.07 to$0.30 - Adjusted earnings per share of
$0.28 to$0.51 - Capital expenditures of approximately
$20 to$25 million - Free cash flow of
$25 to$35 million
Dunn concluded, "
Conference Call and Webcast Information
Webcast: https://theshyftgroup.com/investor-relations/webcasts/
Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international); passcode: 10185321
About
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. 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
CONTACTS:
MEDIA
Sydney Lepora
Director, Corporate Communications
Sydney.Lepora@theshyftgroup.com
586.413.4112
INVESTORS:
Vice President
Investor Relations and
Randy.Wilson@theshyftgroup.com
248.727.3755
|
|||
Consolidated Balance Sheets |
|||
(In thousands) |
|||
(Unaudited) |
|||
|
|
|
|
|
2024 |
|
2023 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 13,251 |
|
$ 9,957 |
Accounts receivable, less allowance of |
78,820 |
|
79,573 |
Contract assets |
52,803 |
|
50,305 |
Inventories |
97,931 |
|
105,135 |
Other receivables - chassis pool agreements |
18,890 |
|
34,496 |
Other current assets |
6,700 |
|
7,462 |
Total current assets |
268,395 |
|
286,928 |
|
|
|
|
Property, plant and equipment, net |
80,905 |
|
83,437 |
Right of use assets – operating leases |
45,078 |
|
45,827 |
|
48,880 |
|
48,880 |
Intangible assets, net |
44,399 |
|
45,268 |
Net deferred tax asset |
17,300 |
|
17,300 |
Other assets |
2,724 |
|
2,409 |
TOTAL ASSETS |
$ 507,681 |
|
$ 530,049 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ 86,159 |
|
$ 99,855 |
Accrued warranty |
8,212 |
|
7,231 |
Accrued compensation and related taxes |
11,675 |
|
13,526 |
Contract liabilities |
3,939 |
|
4,756 |
Operating lease liability |
10,050 |
|
10,817 |
Other current liabilities and accrued expenses |
12,605 |
|
11,965 |
Short-term debt - chassis pool agreements |
18,890 |
|
34,496 |
Current portion of long-term debt |
164 |
|
185 |
Total current liabilities |
151,694 |
|
182,831 |
|
|
|
|
Other non-current liabilities |
7,265 |
|
8,184 |
Long-term operating lease liability |
36,776 |
|
36,724 |
Long-term debt, less current portion |
65,121 |
|
50,144 |
Total liabilities |
260,856 |
|
277,883 |
Shareholders' equity: |
|
|
|
Preferred stock, no par value: 2,000 shares authorized (none issued) |
- |
|
- |
Common stock, no par value : 80,000 shares authorized; 34,361 and 34,303 outstanding |
94,790 |
|
93,705 |
Retained earnings |
152,035 |
|
158,461 |
Total shareholders' equity |
246,825 |
|
252,166 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 507,681 |
|
$ 530,049 |
Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) |
||||||
|
||||||
|
Three Months Ended
|
|
||||
|
2024 |
|
2023 |
|
||
|
|
|
|
|
|
|
Sales |
$ |
197,889 |
|
$ |
243,439 |
|
Cost of products sold |
|
163,827 |
|
|
200,515 |
|
Gross profit |
|
34,062 |
|
|
42,924 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Research and development |
|
3,719 |
|
|
6,949 |
|
Selling, general and administrative |
|
32,273 |
|
|
32,289 |
|
Total operating expenses |
|
35,992 |
|
|
39,238 |
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(1,930) |
|
|
3,686 |
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
Interest expense |
|
(2,053) |
|
|
(1,648) |
|
Other income |
|
97 |
|
|
70 |
|
Total other expense |
|
(1,956) |
|
|
(1,578) |
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
(3,886) |
|
|
2,108 |
|
Income tax expense |
|
783 |
|
|
430 |
|
Net income (loss) |
|
(4,669) |
|
|
1,678 |
|
Less: net loss attributable to non-controlling interest |
|
- |
|
|
32 |
|
Net income (loss) attributable to |
$ |
(4,669) |
|
$ |
1,710 |
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
(0.14) |
|
$ |
0.05 |
|
Diluted earnings (loss) per share |
$ |
(0.14) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding |
|
34,319 |
|
|
35,058 |
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding |
|
34,319 |
|
|
35,340 |
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
||||||
|
||||||
|
Three Months
Ended |
|
||||
|
2024 |
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
Net income (loss) |
$ |
(4,669) |
|
$ |
1,678 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
|
|
|
|
|
|
Depreciation and amortization |
|
4,435 |
|
|
3,864 |
|
Non-cash stock based compensation expense |
|
1,474 |
|
|
1,827 |
|
Loss on disposal of assets |
|
66 |
|
|
- |
|
Changes in accounts receivable and contract assets |
|
(1,746) |
|
|
22,500 |
|
Changes in inventories |
|
7,204 |
|
|
(9,147) |
|
Changes in accounts payable |
|
(10,119) |
|
|
(16,920) |
|
Changes in accrued compensation and related taxes |
|
(1,851) |
|
|
419 |
|
Changes in accrued warranty |
|
981 |
|
|
(978) |
|
Changes in other assets and liabilities |
|
268 |
|
|
2,644 |
|
Net cash provided by (used in) operating activities |
|
(3,957) |
|
|
5,887 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(5,719) |
|
|
(4,469) |
|
Proceeds from sale of property, plant and equipment |
|
75 |
|
|
25 |
|
Acquisition of business, net of cash acquired |
|
- |
|
|
(500) |
|
Net cash used in investing activities |
|
(5,644) |
|
|
(4,944) |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from long-term debt |
|
40,000 |
|
|
40,000 |
|
Payments on long-term debt |
|
(25,000) |
|
|
(31,000) |
|
Payments of dividends |
|
(1,716) |
|
|
(1,878) |
|
Purchase and retirement of common stock |
|
- |
|
|
(8,765) |
|
Exercise and vesting of stock incentive awards |
|
(389) |
|
|
(3,470) |
|
Net cash provided by (used in) financing activities |
|
12,895 |
|
|
(5,113) |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
3,294 |
|
|
(4,170) |
|
Cash and cash equivalents at beginning of period |
|
9,957 |
|
|
11,548 |
|
Cash and cash equivalents at end of period |
$ |
13,251 |
|
$ |
7,378 |
|
|
|
|
|
|
|
|
Sales and Other Financial Information by Business Segment (Unaudited) |
|||||||||||||||||
|
|||||||||||||||||
Quarter Ended |
|
|
|||||||||||||||
|
|
Business Segments |
|
|
|
|
|
||||||||||
|
|
Fleet Vehicles |
|
Specialty |
|
Eliminations & |
|
|
|
|
|||||||
|
|
& Services |
|
Vehicles |
|
Other |
|
Consolidated |
|
|
|||||||
|
Fleet vehicle sales |
$ |
95,478 |
|
$ |
- |
|
$ |
- |
|
$ |
95,478 |
|
|
|||
|
Motorhome chassis sales |
|
- |
|
|
30,771 |
|
|
- |
|
|
30,771 |
|
|
|||
|
Other specialty vehicles sales |
|
- |
|
|
53,405 |
|
|
- |
|
|
53,405 |
|
|
|||
|
Aftermarket parts and accessories sales |
|
12,281 |
|
|
5,954 |
|
|
- |
|
|
18,235 |
|
|
|||
|
Total Sales |
$ |
107,759 |
|
$ |
90,130 |
|
$ |
- |
|
$ |
197,889 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA |
$ |
935 |
|
$ |
16,973 |
|
$ |
(11,820) |
|
$ |
6,088 |
|
|
Sales and Other Financial Information by Business Segment (Unaudited) |
|
|
|||||||||||||||
|
|
|
|||||||||||||||
Quarter Ended |
|
|
|||||||||||||||
|
|
Business Segments |
|
|
|
|
|
||||||||||
|
|
Fleet Vehicles |
|
Specialty |
|
Eliminations & |
|
|
|
|
|
||||||
|
|
& Services |
|
Vehicles |
|
Other |
|
Consolidated |
|
|
|||||||
|
Fleet vehicle sales |
$ |
147,279 |
|
$ |
- |
|
$ |
- |
|
$ |
147,279 |
|
|
|||
|
Motorhome chassis sales |
|
- |
|
|
27,960 |
|
|
- |
|
|
27,960 |
|
|
|||
|
Other specialty vehicles sales |
|
- |
|
|
54,697 |
|
|
(3,181) |
|
|
51,516 |
|
|
|||
|
Aftermarket parts and accessories sales |
|
12,154 |
|
|
4,530 |
|
|
- |
|
|
16,684 |
|
|
|||
|
Total Sales |
$ |
159,433 |
|
$ |
87,187 |
|
$ |
(3,181) |
|
$ |
243,439 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA |
$ |
12,473 |
|
$ |
13,852 |
|
$ |
(15,537) |
|
$ |
10,788 |
|
|
Sales and Other Financial Information by Business Segment (Unaudited) |
|
|||||||||||||||||
|
|
|||||||||||||||||
Period End Backlog (amounts in thousands of dollars) |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fleet Vehicles and Services |
$ |
356,089 |
|
$ |
325,003 |
|
$ |
383,448 |
|
$ |
437,802 |
|
$ |
584,933 |
|
|||
Specialty Vehicles |
|
83,334 |
|
|
84,269 |
|
|
80,983 |
|
|
72,402 |
|
|
82,478 |
|
|||
Total Backlog |
$ |
439,423 |
|
$ |
409,272 |
|
$ |
464,431 |
|
$ |
510,204 |
|
$ |
667,411 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
This release presents Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted net income, adjusted earnings per share, and free cash flow, each of which is a non-GAAP financial measure.
We define Adjusted EBITDA as income 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.
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.
We define free cash flow as net cash provided by (used in) operating activities less purchases of property, plant and equipment and add proceeds from sale of property, plant and equipment. We believe this measure of free cash flow provides management and investors further useful information on cash generation or use in our operations.
We believe that the presentation of these non-GAAP measures, 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.
Consolidated Financial Summary (Non-GAAP) (In thousands, except per share data) (Unaudited) |
|||||
|
|||||
|
Three Months Ended |
||||
|
2024 |
% of |
|
2023 |
% of |
Net income (loss) |
$ (4,669) |
(2.4 %) |
|
$ 1,678 |
0.7 % |
Net loss attributable to non-controlling interest |
- |
|
|
32 |
|
Add (subtract): |
|
|
|
|
|
Restructuring and other related charges |
52 |
|
|
62 |
|
Acquisition related expenses and adjustments |
- |
|
|
291 |
|
Non-cash stock-based compensation expense |
1,474 |
|
|
1,827 |
|
Legacy legal matters |
1,850 |
|
|
956 |
|
CEO transition |
110 |
|
|
- |
|
Tax effect of adjustments |
(258) |
|
|
(585) |
|
Adjusted net income (loss) |
$ (1,441) |
(0.7 %) |
|
$ 4,261 |
1.8 % |
|
|
|
|
|
|
Net income (loss) |
$ (4,669) |
(2.4 %) |
|
$ 1,678 |
0.7 % |
Net loss attributable to non-controlling interest |
- |
|
|
32 |
|
Add (subtract): |
|
|
|
|
|
Depreciation and amortization |
4,435 |
|
|
3,864 |
|
Income tax expense |
783 |
|
|
430 |
|
Interest expense |
2,053 |
|
|
1,648 |
|
EBITDA |
$ 2,602 |
1.3 % |
|
$ 7,652 |
3.1 % |
Add: |
|
|
|
|
|
Restructuring and other related charges |
52 |
|
|
62 |
|
Acquisition related expenses and adjustments |
- |
|
|
291 |
|
Non-cash stock-based compensation expense |
1,474 |
|
|
1,827 |
|
Legacy legal matters |
1,850 |
|
|
956 |
|
CEO transition |
110 |
|
|
- |
|
Adjusted EBITDA |
$ 6,088 |
3.1 % |
|
$ 10,788 |
4.4 % |
|
|
|
|
|
|
Diluted net earnings (loss) per share |
$ (0.14) |
|
|
$ 0.05 |
|
Add (subtract): |
|
|
|
|
|
Restructuring and other related charges |
- |
|
|
- |
|
Acquisition related expenses and adjustments |
- |
|
|
0.01 |
|
Non-cash stock-based compensation expense |
0.05 |
|
|
0.05 |
|
Legacy legal matters |
0.05 |
|
|
0.03 |
|
CEO transition |
- |
|
|
- |
|
Tax effect of adjustments |
- |
|
|
(0.02) |
|
Adjusted diluted net earnings (loss) per share |
$ (0.04) |
|
|
$ 0.12 |
|
Consolidated Financial Summary (Non-GAAP) (In thousands) (Unaudited) |
||||||
|
||||||
|
Three Months Ended
|
|||||
|
2024 |
|
2023 |
|
||
Net cash provided by (used in) operating activities |
$ |
(3,957) |
|
$ |
5,887 |
|
Purchases of property, plant and equipment |
|
(5,719) |
|
|
(4,469) |
|
Proceeds from sale of property, plant and equipment |
|
75 |
|
|
25 |
|
Free cash flow |
$ |
(9,601) |
|
$ |
1,443 |
|
Consolidated Financial Summary (Non-GAAP) (In thousands, except per share data) (Unaudited) |
|||||||
|
|||||||
|
|
|
Outlook |
||||
|
|
|
Year Ended |
||||
|
|
|
Low |
|
Mid |
|
High |
Net income |
|
|
$ 2,479 |
|
$ 6,481 |
|
$ 10,483 |
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
20,500 |
|
20,500 |
|
20,500 |
Interest expense |
|
|
7,500 |
|
7,500 |
|
7,500 |
Taxes |
|
|
621 |
|
1,619 |
|
2,617 |
EBITDA |
|
|
$ 31,100 |
|
$ 36,100 |
|
$ 41,100 |
Add: |
|
|
|
|
|
|
|
Non-cash stock-based compensation and other charges |
|
8,900 |
|
8,900 |
|
8,900 |
|
Adjusted EBITDA |
|
|
$ 40,000 |
|
$ 45,000 |
|
$ 50,000 |
|
|
|
|
|
|
|
|
Earnings per share |
|
|
$ 0.07 |
|
$ 0.19 |
|
$ 0.30 |
Add: |
|
|
|
|
|
|
|
Non-cash stock-based compensation and other charges |
|
0.26 |
|
0.26 |
|
0.26 |
|
Less: tax effect of adjustments |
|
|
(0.05) |
|
(0.05) |
|
(0.05) |
Adjusted earnings per share |
|
|
$ 0.28 |
|
$ 0.40 |
|
$ 0.51 |
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SOURCE