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
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 ofSeptember 30, 2024 , down$119.0 million , or 25.6%, compared to$464.4 million as ofSeptember 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
2024 Financial Outlook
"In the quarter,
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
|
Footnote: 1.) Consolidated backlog does not reflect Blue Arc order activity |
Conference Call and Webcast Information
Webcast: https://theshyftgroup.com/investor-relations/webcasts/
Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international)
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. More information about factors that potentially could affect our financial results is included in our filings with the
CONTACTS
MEDIA
Director, Corporate Communications
Sydney.Machesky@theshyftgroup.com
586.413.4112
INVESTORS
Vice President, Investor Relations and
Randy.Wilson@theshyftgroup.com
248.727.3755
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|
Consolidated Balance Sheets |
|||
|
(In thousands) |
|||
|
(Unaudited) |
|||
|
|
|
|
|
|
|
2024 |
|
2023 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ 21,440 |
|
$ 9,957 |
|
Accounts receivable, less allowance of |
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 |
|
|
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 and |
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 |
|
|
|
|||||||||||||||
|
|
|
|||||||||||||||
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(2,392) |
|
|
|
(1,572) |
|
|
|
(6,198) |
|
|
|
(4,697) |
|
|
Other income |
|
|
138 |
|
|
|
15 |
|
|
|
315 |
|
|
|
209 |
|
|
Total other expense |
|
|
(2,254) |
|
|
|
(1,557) |
|
|
|
(5,883) |
|
|
|
(4,488) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
3,075 |
|
|
|
2,567 |
|
|
|
1,244 |
|
|
|
9,916 |
|
|
Income tax expense (benefit) |
|
|
(48) |
|
|
|
(1,951) |
|
|
|
626 |
|
|
|
(965) |
|
|
Net income |
|
|
3,123 |
|
|
|
4,518 |
|
|
|
618 |
|
|
|
10,881 |
|
|
Less: net loss attributable to non-controlling interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to |
|
$ |
3,123 |
|
|
$ |
4,518 |
|
|
$ |
618 |
|
|
$ |
10,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.09 |
|
|
$ |
0.13 |
|
|
$ |
0.02 |
|
|
$ |
0.31 |
|
|
Diluted earnings per share |
|
$ |
0.09 |
|
|
$ |
0.13 |
|
|
$ |
0.02 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding |
|
|
34,474 |
|
|
|
34,604 |
|
|
|
34,399 |
|
|
|
34,863 |
|
|
Diluted weighted average common shares outstanding |
|
|
34,651 |
|
|
|
34,637 |
|
|
|
34,527 |
|
|
|
34,985 |
|
|
|
|
|||||||
|
|
|
|||||||
|
|
Nine Months
Ended |
|
||||||
|
|
|
2024 |
|
|
2023 |
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
|
||
|
Net income |
$ |
618 |
|
$ |
10,881 |
|
||
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
||
|
Depreciation and amortization |
|
14,488 |
|
|
12,360 |
|
||
|
Non-cash stock-based compensation expense |
|
5,672 |
|
|
5,187 |
|
||
|
Loss on disposal of assets |
|
167 |
|
|
132 |
|
||
|
Deferred income taxes |
|
(9) |
|
|
(614) |
|
||
|
Changes in accounts receivable and contract assets |
|
7,454 |
|
|
62,730 |
|
||
|
Changes in inventories |
|
6,949 |
|
|
(15,039) |
|
||
|
Changes in accounts payable |
|
(21,509) |
|
|
(25,194) |
|
||
|
Changes in accrued compensation and related taxes |
|
3,678 |
|
|
1,693 |
|
||
|
Changes in accrued warranty |
|
1,596 |
|
|
(844) |
|
||
|
Changes in other assets and liabilities |
|
(1,888) |
|
|
(6,474) |
|
||
|
Net cash provided by operating activities |
|
17,216 |
|
|
44,818 |
|
||
|
|
|
|
|
|
|
|
||
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
|
Purchases of property, plant and equipment |
|
(11,482) |
|
|
(16,143) |
|
||
|
Proceeds from sale of property, plant and equipment |
|
91 |
|
|
100 |
|
||
|
Acquisition of business, net of cash acquired |
|
(48,631) |
|
|
(500) |
|
||
|
Net cash used in investing activities |
|
(60,022) |
|
|
(16,543) |
|
||
|
|
|
|
|
|
|
|
||
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
|
Proceeds from long-term debt |
|
135,000 |
|
|
100,000 |
|
||
|
Payments on long-term debt |
|
(75,000) |
|
|
(101,000) |
|
||
|
Payments of dividends |
|
(5,222) |
|
|
(5,392) |
|
||
|
Purchase and retirement of common stock |
|
- |
|
|
(19,083) |
|
||
|
Exercise and vesting of stock incentive awards |
|
(489) |
|
|
(4,472) |
|
||
|
Net cash provided by (used in) financing activities |
|
54,289 |
|
|
(29,947) |
|
||
|
|
|
|
|
|
|
|
||
|
Net increase (decrease) in cash and cash equivalents |
|
11,483 |
|
|
(1,672) |
|
||
|
Cash and cash equivalents at beginning of period |
|
9,957 |
|
|
11,548 |
|
||
|
Cash and cash equivalents at end of period |
$ |
21,440 |
|
$ |
9,876 |
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|||||||||||||||
|
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|
|||||||||||||||
|
|
Quarter Ended |
|
|||||||||||||||
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|
|||||||||||||||
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|
|
|
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|
|
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|
Business Segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet Vehicles |
|
|
Specialty |
|
|
Eliminations & |
|
|
|
|
|
||
|
|
|
|
|
& Services |
|
|
Vehicles |
|
|
Other |
|
|
Consolidated |
|
|
||
|
|
Fleet vehicle sales |
$ |
87,773 |
|
$ |
- |
|
$ |
- |
|
$ |
87,773 |
|
|
|||
|
|
Motorhome chassis sales |
|
|
- |
|
|
|
11,194 |
|
|
|
- |
|
|
11,194 |
|
|
|
|
Other specialty vehicle sales |
|
|
- |
|
|
|
66,983 |
|
|
|
850 |
|
|
67,833 |
|
|
|
|
Aftermarket parts and accessories sales |
|
|
18,087 |
|
|
|
9,188 |
|
|
|
- |
|
|
27,275 |
|
|
|
|
Total Sales |
$ |
105,860 |
|
$ |
87,365 |
|
$ |
850 |
|
$ |
194,075 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
9,828 |
|
$ |
16,146 |
|
$ |
(11,630) |
$ |
14,344 |
|
|
|||||
|
|
|
|
|
||||||||||||||
|
|
|
|
|
||||||||||||||
|
|
Quarter Ended |
|
|
||||||||||||||
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
Business Segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet Vehicles |
|
|
Specialty |
|
|
Eliminations & |
|
|
|
|
|
||
|
|
|
|
|
& Services |
|
|
Vehicles |
|
|
Other |
|
|
Consolidated |
|
|
||
|
|
Fleet vehicle sales |
$ |
108,491 |
|
$ |
- |
|
$ |
- |
|
$ |
108,491 |
|
|
|||
|
|
Motorhome chassis sales |
|
|
- |
|
|
|
20,519 |
|
|
|
- |
|
|
20,519 |
|
|
|
|
Other specialty vehicle sales |
|
|
- |
|
|
|
50,557 |
|
|
|
444 |
|
|
51,001 |
|
|
|
|
Aftermarket parts and accessories sales |
|
|
15,768 |
|
|
|
5,546 |
|
|
|
- |
|
|
21,314 |
|
|
|
|
Total Sales |
$ |
124,259 |
|
$ |
76,622 |
|
$ |
444 |
|
$ |
201,325 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
7,977 |
|
$ |
15,988 |
|
$ |
(12,977) |
|
$ |
10,988 |
|
|
||||
|
|
||||||||||||||||||
|
|
||||||||||||||||||
|
Period End Backlog (amounts in thousands of dollars) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Fleet Vehicles and Services |
$ |
267,952 |
|
$ |
294,586 |
$ |
356,089 |
|
$ |
325,003 |
$ |
383,448 |
|
|||||
|
Specialty Vehicles |
|
|
77,456 |
|
|
59,856 |
|
|
83,334 |
|
|
|
84,269 |
|
80,983 |
|
||
|
Total Backlog |
$ |
345,408 |
|
$ |
354,442 |
$ |
439,423 |
|
$ |
409,272 |
$ |
464,431 |
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and long-term incentive compensation for certain members of 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.
|
|
|||||
|
|
|||||
|
|
Three Months Ended |
||||
|
|
2024 |
% of sales |
|
2023 |
% of sales |
|
Net income |
$ 3,123 |
1.6 % |
|
$ 4,518 |
2.2 % |
|
Add (subtract): |
|
|
|
|
|
|
Restructuring and other related charges |
186 |
|
|
58 |
|
|
Acquisition related expenses and adjustments |
1,225 |
|
|
149 |
|
|
Non-cash stock-based compensation expense |
2,188 |
|
|
2,097 |
|
|
CEO transition |
- |
|
|
235 |
|
|
Tax effect of adjustments |
(665) |
|
|
(363) |
|
|
Adjusted net income |
$ 6,057 |
3.1 % |
|
$ 6,694 |
3.3 % |
|
|
|
|
|
|
|
|
Net income |
$ 3,123 |
1.6 % |
|
$ 4,518 |
2.2 % |
|
Add (subtract): |
|
|
|
|
|
|
Depreciation and amortization |
5,278 |
|
|
4,310 |
|
|
Income tax benefit |
(48) |
|
|
(1,951) |
|
|
Interest expense |
2,392 |
|
|
1,572 |
|
|
EBITDA |
$ 10,745 |
5.5 % |
|
$ 8,449 |
4.2 % |
|
Add: |
|
|
|
|
|
|
Restructuring and other related charges |
186 |
|
|
58 |
|
|
Acquisition related expenses and adjustments |
1,225 |
|
|
149 |
|
|
Non-cash stock-based compensation expense |
2,188 |
|
|
2,097 |
|
|
CEO transition |
- |
|
|
235 |
|
|
Adjusted EBITDA |
$ 14,344 |
7.4 % |
|
$ 10,988 |
5.5 % |
|
|
|
|
|
|
|
|
Diluted net earnings per share |
$ 0.09 |
|
|
$ 0.13 |
|
|
Add (subtract): |
|
|
|
|
|
|
Restructuring and other related charges |
- |
|
|
- |
|
|
Acquisition related expenses and adjustments |
0.04 |
|
|
- |
|
|
Non-cash stock-based compensation expense |
0.06 |
|
|
0.06 |
|
|
CEO transition |
- |
|
|
0.01 |
|
|
Tax effect of adjustments |
(0.01) |
|
|
(0.01) |
|
|
Adjusted diluted net earnings per share |
$ 0.18 |
|
|
$ 0.19 |
|
|
|
||||||
|
|
||||||
|
|
Nine Months Ended September 30, |
|||||
|
|
|
2024 |
|
|
2023 |
|
|
Net cash provided by operating activities |
$ |
17,216 |
|
$ |
44,818 |
|
|
Purchases of property, plant and equipment |
|
(11,482) |
|
|
(16,143) |
|
|
Proceeds from sale of property, plant and equipment |
|
91 |
|
|
100 |
|
|
Free cash flow |
$ |
5,825 |
|
$ |
28,775 |
|
|
|
|||||||
|
|
|||||||
|
|
|
|
Outlook |
||||
|
|
|
|
Twelve Months Ended |
||||
|
|
|
|
Low |
|
Mid |
|
High |
|
Income from continuing operations |
|
|
$ 2,600 |
|
$ 4,750 |
|
$ 6,900 |
|
Add: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
21,000 |
|
20,450 |
|
19,900 |
|
Interest expense |
|
|
8,400 |
|
8,400 |
|
8,400 |
|
Taxes |
|
|
640 |
|
1,195 |
|
1,750 |
|
EBITDA |
|
|
$ 32,640 |
|
$ 34,795 |
|
$ 36,950 |
|
Add: |
|
|
|
|
|
|
|
|
Non-cash stock-based compensation and other charges |
|
12,360 |
|
12,705 |
|
13,050 |
|
|
Adjusted EBITDA |
|
|
$ 45,000 |
|
$ 47,500 |
|
$ 50,000 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
$ 0.07 |
|
$ 0.14 |
|
$ 0.20 |
|
Add: |
|
|
|
|
|
|
|
|
Non-cash stock-based compensation and other charges |
|
0.35 |
|
0.36 |
|
0.37 |
|
|
Less tax effect of adjustments |
|
|
(0.07) |
|
(0.07) |
|
(0.07) |
|
Adjusted earnings per share |
|
|
$ 0.35 |
|
$ 0.43 |
|
$ 0.50 |
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