Shyft Group Reports Fourth Quarter and Full-Year 2020 Results
The Shyft Group (NASDAQ: SHYF) reported its financial results for 2020, showing sales of $676 million, down 10.7% from 2019, due largely to the absence of a one-time USPS order. However, adjusted EBITDA increased by 19.2% to $76.3 million, reflecting improved operational efficiency. The company generated $65.8 million in cash from operations and reduced debt by $65 million. Looking ahead, 2021 guidance estimates revenue between $850 million and $900 million and earnings per share between $1.42 and $1.62. The backlog as of December 31, 2020, totalled $478.7 million, up 42.2% year-over-year.
- Adjusted EBITDA increased by 19.2% to $76.3 million, 11.3% of sales.
- Gross margin improved to 21.6%, up 610 basis points from the previous year.
- Generated $65.8 million in cash from operating activities, a 92.6% increase.
- Reduced debt by $65 million during the year.
- Consolidated backlog rose to $478.7 million, a 42.2% increase year-over-year.
- Sales decreased by 10.7%, from $756.5 million in 2019 to $676 million in 2020.
- Fourth quarter sales fell by 4.7% year-over-year to $171.6 million.
NOVI, Mich., March 11, 2021 /PRNewswire/ -- The Shyft Group, Inc. (NASDAQ: SHYF) (the "Company"), the North American leader in specialty vehicle manufacturing and assembly for the commercial and fleet vehicle industries (including last mile delivery, specialty service and vocation-specific upfit markets), as well as for the recreational vehicle markets, today reported operating results for the fourth quarter and full-year periods ending December 31, 2020.
As part of its transformational strategy to further focus on accelerating growth and profitability, the Company divested its Emergency Response ("ER") business effective February 1, 2020, as previously announced. Accordingly, the financial results of ER have been classified as discontinued operations for all periods presented. Unless otherwise noted, financial results presented are based on continuing operations.
Sales for the twelve-month period ending December 31, 2019, include
Full-Year 2020 Highlights from Continuing Operations
For the full-year 2020 compared to the full-year 2019:
- Sales of
$676.0 million , a decrease of$80.5 million , or10.7% , from$756.5 million . Excluding USPS order, sales increased$10.9 million , or1.6% , despite pandemic related headwinds throughout the year. - Gross margin of
21.6% of sales, a 610 basis point improvement from15.5% of sales, due to the momentum from the Company's strategy to focus on higher margin products and actions taken to improve overall operating efficiency. - Income from continuing operations of
$38.3 million , or$1.05 per share, compared to$36.8 million , or$1.03 per share. - Adjusted EBITDA of
$76.3 million , or a record11.3% of sales, an increase of$12.3 million , or19.2% , from$64.0 million , or8.5% of sales. The USPS order reduced adjusted EBITDA as a percentage of sales by approximately 110 basis points in the prior year. - Adjusted net income of
$48.2 million , or$1.34 per share, an increase of$4.3 million , or9.9% , from$43.9 million , or$1.24 per share. - Generated
$65.8 million of cash from operating activities, an increase of$31.6 million , or92.6% from$34.2 million and reduced debt by$65.0 million . - Consolidated backlog at December 31, 2020, totaled
$478.7 million , up$142.1 million , or42.2% , compared to$336.6 million at December 31, 2019, reflecting continued strong demand across business units.
Fourth Quarter 2020 Highlights from Continuing Operations
For the fourth quarter of 2020 compared to the fourth quarter of 2019:
- Sales of
$171.6 million , a decrease of$8.4 million , or4.7% , from$180.0 million . - Income from continuing operations of
$8.3 million , or$0.22 per share, compared to$14.3 million , or$0.40 per share. - Adjusted EBITDA of
$16.0 million , or9.3% of sales, a decrease of$7.6 million , or32.0% , from$23.6 million , or13.1% of sales. - Adjusted net income of
$10.1 million , or$0.27 per share, compared to$16.5 million , or$0.47 per share. - Repurchased 300,000 shares of The Shyft Group common stock for approximately
$7.5 million in the aggregate pursuant to the Company's share repurchase authorization. - Purchased the F3 MFG, Inc. business ("DuraMag"), a leading aluminum service body and accessory manufacturer of the well-recognized DuraMag® and Magnum® brands.
"By all accounts, 2020 proved to be a historic and transformative year for The Shyft Group, as we strategically aligned our product portfolio to take advantage of more profitable growth markets after the sale of the ER business," said Daryl Adams, President and Chief Executive Officer. "I am incredibly proud and appreciative of the tremendous efforts of our entire team. Throughout 2020, we rose to the challenge to overcome the impact of the COVID-19 pandemic and related plant disruptions to meet customer demand, while ending the year with nearly
Full-Year 2020 Segment Results from Continuing Operations
For the full-year 2020 compared to the full-year 2019:
Fleet Vehicles and Services (FVS)
FVS segment sales were
Adjusted EBITDA increased
The segment backlog at December 31, 2020, totaled a record
Specialty Vehicles (SV)
SV segment sales were
Adjusted EBITDA was
Segment backlog at December 31, 2020, totaled
Liquidity Update
The Shyft Group's access to capital remains strong at
2021 Outlook
"Our record EBITDA margin performance this past year and the strength of our balance sheet reflects the power of our recently transformed company. We effectively replaced a non-strategic ER business with two leading service body companies that generate nearly
Company guidance for full-year 2021 from continuing operations is as follows:
- Revenue to be in the range of
$850 to$900 million - Net income of
$51 to$58 million - Adjusted EBITDA of
$95 to$105 million - Effective tax rate of approximately
26% - Earnings per share of
$1.42 -$1.62 - Adjusted earnings per share of
$1.65 -$1.85
"We look ahead to 2021 with optimism. The actions taken to date to support our growth strategy are aligned to take advantage of the strength of our end markets. During 2021, we will continue to invest in our exclusive VelocityTM line of vehicles, including additional ICE and EV platforms to support our customer demands and we plan to opportunistically pursue acquisitions to penetrate new markets while maintaining a focus on last mile delivery. We emerge from 2020 in an advantageous position, well equipped to drive sustainable, profitable growth in each of our businesses and to drive long-term value for our shareholders," concluded Adams.
Conference Call, Webcast, Investor Presentation and Investor Information
The Shyft Group will host a conference call for analysts and portfolio managers 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.theshyftgroup.com/webcasts or click on "Investor Relations" then "Webcasts"
Conference Call: 1-877-317-6789 (domestic) or 412-317-6789 (international); passcode: 10152483
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 go-to-market brands include Utilimaster, Royal Truck Body, DuraMag and Magnum, Strobes-R-Us, Spartan RV Chassis, and Builtmore Contract Manufacturing, which are well known in their respective industries for quality, durability, first-to-market innovation, and industry-leading aftermarket parts, service, and support. The Company employs approximately 3,000 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 from continuing operations of
This release contains several forward-looking statements that are not historical facts, including our revenue and earnings guidance, all other information provided with respect to our outlook for 2021 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 are not historical facts. These statements can be identified by words such as "believe," "expect," "intend," "potential," "future," "may," "will," "should," and similar expressions regarding future expectations. Furthermore, statements contained in this release relating to the COVID-19 pandemic, the impact of which remains inherently uncertain on our financial results, are forward-looking statements. These forward-looking statements involve various known and unknown risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, and likelihood. Therefore, actual performance and results may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could contribute to these differences include future developments relating to the COVID-19 pandemic, including governmental responses, supply chain shortages, and potential labor issues; operational and other complications that may arise affecting the implementation of our plans and business objectives; continued pressures caused by economic conditions including weaknesses resulting from the COVID-19 pandemic; challenges that may arise in connection with the integration of new businesses or assets we acquire or the disposition of assets; restructuring of our operations, and/or our expansion into new geographic markets; issues unique to government contracting, such as competitive bidding processes, qualification requirements, and delays or changes in funding; disruptions within our dealer network; changes in our relationships with major customers, suppliers, or other business partners; changes in the demand or supply of products within our markets or raw materials needed to manufacture those products; and changes in laws and regulations affecting our business. Other factors that could affect outcomes are set forth in our Annual Report on Form 10-K and other filings we make 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.
CONTACT:
Juris Pagrabs
Group Treasurer & Director of Investor Relations
The Shyft Group, Inc
517-997-3862
The Shyft Group, Inc. and Subsidiaries | ||||||||
Consolidated Balance Sheets | ||||||||
(In thousands, except par value) | ||||||||
(Unaudited) | ||||||||
December 31, | December 31, | |||||||
2020 | 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 20,995 | $ | 19,349 | ||||
Accounts receivable, less allowance of | 64,695 | 58,874 | ||||||
Contract assets | 9,414 | 10,898 | ||||||
Inventories, net | 46,428 | 59,456 | ||||||
Other receivables - chassis pool agreements | 6,503 | 8,162 | ||||||
Other current assets | 8,172 | 5,344 | ||||||
Current assets held for sale | - | 90,725 | ||||||
Total current assets | 156,207 | 252,808 | ||||||
Property, plant and equipment, net | 45,734 | 40,074 | ||||||
Right of use assets – operating leases | 43,430 | 32,147 | ||||||
Goodwill | 49,481 | 43,632 | ||||||
Intangible assets, net | 56,386 | 54,061 | ||||||
Other assets | 2,052 | 2,295 | ||||||
Net deferred tax asset | 5,759 | 25,520 | ||||||
TOTAL ASSETS | $ | 359,049 | $ | 450,537 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 47,487 | $ | 54,713 | ||||
Accrued warranty | 5,633 | 5,694 | ||||||
Accrued compensation and related taxes | 17,134 | 15,841 | ||||||
Deposits from customers | 756 | 2,640 | ||||||
Operating lease liability | 7,508 | 5,162 | ||||||
Other current liabilities and accrued expenses | 8,121 | 15,967 | ||||||
Short-term debt - chassis pool agreements | 6,503 | 8,162 | ||||||
Current portion of long-term debt | 221 | 177 | ||||||
Current liabilities held for sale | - | 49,601 | ||||||
Total current liabilities | 93,363 | 157,957 | ||||||
Other non-current liabilities | 5,447 | 4,922 | ||||||
Long-term operating lease liability | 36,662 | 27,241 | ||||||
Long-term debt, less current portion | 23,418 | 88,670 | ||||||
Total liabilities | 158,890 | 278,790 | ||||||
Shareholders' equity: | ||||||||
Preferred stock, no par value: 2,000 shares authorized (none issued) | - | - | ||||||
Common stock, no par value: 80,000 shares authorized; 35,344 and 35,343 | 91,044 | 353 | ||||||
Additional paid in capital | - | 85,148 | ||||||
Retained earnings | 109,286 | 86,764 | ||||||
Total The Shyft Group, Inc. shareholders' equity | 200,330 | 172,265 | ||||||
Non-controlling interest | (171) | (518) | ||||||
Total shareholders' equity | 200,159 | 171,747 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 359,049 | $ | 450,537 | ||||
The Shyft Group, Inc. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Sales | $ | 171,582 | $ | 179,960 | $ | 675,973 | $ | 756,542 | ||||||||
Cost of products sold | 136,361 | 142,541 | 529,696 | 639,515 | ||||||||||||
Gross profit | 35,221 | 37,419 | 146,277 | 117,027 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 865 | 1,389 | 4,361 | 4,864 | ||||||||||||
Selling, general and administrative | 23,534 | 17,734 | 93,068 | 64,549 | ||||||||||||
Total operating expenses | 24,399 | 19,123 | 97,429 | 69,413 | ||||||||||||
Operating income | 10,822 | 18,296 | 48,848 | 47,614 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (91) | (1,008) | (1,293) | (1,839) | ||||||||||||
Interest and other income | 358 | 423 | 601 | 1,370 | ||||||||||||
Total other income (expense) | 267 | (585) | (692) | (469) | ||||||||||||
Income from continuing operations before income taxes | 11,089 | 17,711 | 48,156 | 47,145 | ||||||||||||
Income tax expense | 2,783 | 3,426 | 9,867 | 10,355 | ||||||||||||
Income from continuing operations | 8,306 | 14,285 | 38,289 | 36,790 | ||||||||||||
Loss from discontinued operations, net of income taxes | (504) | (41,952) | (5,123) | (49,216) | ||||||||||||
Net income (loss) | 7,802 | (27,667) | 33,166 | (12,426) | ||||||||||||
Less: net income (loss) attributable to non-controlling interest | 169 | 154 | 347 | 140 | ||||||||||||
Net income attributable to The Shyft Group, Inc. | $ | 7,633 | $ | (27,821) | $ | 32,819 | $ | (12,566) | ||||||||
Basic earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.40 | $ | 1.07 | $ | 1.03 | ||||||||
Discontinued operations | $ | (0.01) | $ | (1.19) | $ | (0.14) | $ | (1.39) | ||||||||
Basic earnings per share | $ | 0.21 | $ | (0.79) | $ | 0.93 | $ | (0.36) | ||||||||
Diluted net earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.40 | $ | 1.05 | $ | 1.03 | ||||||||
Discontinued operations | $ | (0.01) | $ | (1.18) | $ | (0.14) | $ | (1.39) | ||||||||
Diluted earnings per share | $ | 0.21 | $ | (0.78) | $ | 0.91 | $ | (0.36) | ||||||||
Basic weighted average common shares outstanding | 35,445 | 35,339 | 35,479 | 35,318 | ||||||||||||
Diluted weighted average common shares outstanding | 36,226 | 35,582 | 36,039 | 35,416 | ||||||||||||
Sales and Other Financial Information by Business Segment | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Period End Backlog (amounts in thousands of dollars) | ||||||||||||||||||||
Dec. 31, | Sept. 30, | Jun. 30, | Mar. 31, | Dec. 31, | ||||||||||||||||
Fleet Vehicles and Services* | $ | 427,338 | $ | 228,870 | $ | 286,955 | $ | 302,236 | $ | 305,876 | ||||||||||
Motorhome Chassis * | 31,580 | 40,387 | 38,804 | 30,641 | 20,097 | |||||||||||||||
Other Vehicles | 19,431 | 11,036 | 11,621 | 11,580 | 10,062 | |||||||||||||||
Aftermarket Parts and Accessories | 302 | 333 | 115 | 198 | 575 | |||||||||||||||
Total Specialty Vehicles | 51,313 | 51,756 | 50,540 | 42,419 | 30,734 | |||||||||||||||
Total Backlog | $ | 478,651 | $ | 280,626 | $ | 337,495 | $ | 344,655 | $ | 336,610 | ||||||||||
* Anticipated time to fill backlog orders at December 31, 2020; five - seven months for Fleet Vehicles and Services; approximately three months for Specialty Vehicles. | ||||||||||||||||||||
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.
Financial Summary | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
The Shyft Group, Inc. | 2020 | % of | 2019 | % of | 2020 | % of | 2019 | % of | |||||||
Income from continuing operations | $ 8,306 | $ 14,285 | $ 38,289 | $ 36,790 | |||||||||||
Net (income) loss attributable to non- | (169) | (154) | (347) | (140) | |||||||||||
Add (subtract): | |||||||||||||||
Restructuring and other related | 16 | 46 | 1,873 | 316 | |||||||||||
Acquisition related expenses and | 410 | 1,544 | 1,332 | 3,531 | |||||||||||
Non-cash stock-based compensation | 1,525 | 1,403 | 7,706 | 5,281 | |||||||||||
Loss from write-off of construction in | - | - | 2,430 | - | |||||||||||
Accelerated depreciation of property, | 366 | - | 3,061 | - | |||||||||||
Favorable tax rate in income taxes | - | - | (2,610) | - | |||||||||||
Deferred tax asset adjustment | 56 | - | 376 | 135 | |||||||||||
Tax effect of adjustments | (441) | (619) | (3,892) | (2,056) | |||||||||||
Adjusted net income | $ 10,069 | $ 16,505 | $ 48,218 | $ 43,857 | |||||||||||
Income from continuing operations | $ 8,306 | $ 14,285 | $ 38,289 | $ 36,790 | |||||||||||
Net (income) loss attributable to non- | (169) | (154) | (347) | (140) | |||||||||||
Add (subtract): | |||||||||||||||
Depreciation and amortization | 3,065 | 2,028 | 13,903 | 6,073 | |||||||||||
Taxes on income | 2,783 | 3,426 | 9,867 | 10,355 | |||||||||||
Interest expense | 91 | 1,008 | 1,293 | 1,839 | |||||||||||
EBITDA | $ 14,076 | $ 20,593 | $ 63,005 | $ 54,917 | |||||||||||
Add (subtract): | |||||||||||||||
Restructuring and other related | 16 | 46 | 1,873 | $ 316 | |||||||||||
Acquisition related expenses and | 410 | 1,544 | 1,332 | 3,531 | |||||||||||
Non-cash stock-based compensation | 1,525 | 1,403 | 7,706 | 5,281 | |||||||||||
Loss from write-off of construction in | - | - | 2,430 | - | |||||||||||
Adjusted EBITDA | $ 16,027 | $ 23,586 | $ 76,346 | $ 64,045 | |||||||||||
Diluted net earnings per share | $ 0.22 | $ 0.40 | $ 1.05 | $ 1.03 | |||||||||||
Add (subtract): | |||||||||||||||
Restructuring and other related | - | - | 0.05 | - | |||||||||||
Acquisition related expenses and | 0.01 | 0.04 | 0.04 | 0.11 | |||||||||||
Non-cash stock-based compensation | 0.04 | 0.05 | 0.21 | 0.15 | |||||||||||
Loss from write-off of construction in | - | - | 0.07 | - | |||||||||||
Accelerated depreciation of property, | 0.01 | - | 0.09 | - | |||||||||||
Deferred tax asset adjustment | - | - | 0.01 | - | |||||||||||
Favorable tax rate in income taxes | - | - | (0.07) | - | |||||||||||
Tax effect of adjustments | (0.01) | (0.02) | (0.11) | (0.05) | |||||||||||
Adjusted diluted net earnings per | $ 0.27 | $ 0.47 | $ 1.34 | $ 1.24 | |||||||||||
Financial Summary (Non-GAAP) | |||||||
Consolidated | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
Forecast | |||||||
Twelve Months Ended December 31, 2021 | |||||||
The Shyft Group, Inc. | Low | Mid | High | ||||
Income from continuing operations | $ 51,028 | $ 54,628 | $ 58,328 | ||||
Add: | |||||||
Depreciation and amortization | 13,462 | 13,462 | 13,462 | ||||
Interest expense | 1,295 | 1,295 | 1,295 | ||||
Taxes | 17,793 | 19,193 | 20,493 | ||||
EBITDA | $ 83,578 | $ 88,578 | $ 93,578 | ||||
Add (subtract): | |||||||
Non-cash stock-based compensation and other charges | 11,422 | 11,422 | 11,422 | ||||
Adjusted EBITDA | $ 95,000 | $ 100,000 | $ 105,000 | ||||
Earnings per share | $ 1.42 | $ 1.52 | $ 1.62 | ||||
Add: | |||||||
Non-cash stock-based compensation and other charges | 0.32 | 0.32 | 0.32 | ||||
Less tax effect of adjustments | (0.09) | (0.09) | (0.09) | ||||
Adjusted earnings per share | $ 1.65 | $ 1.75 | $ 1.85 | ||||
View original content to download multimedia:http://www.prnewswire.com/news-releases/shyft-group-reports-fourth-quarter-and-full-year-2020-results-301245472.html
SOURCE The Shyft Group, Inc.
FAQ
What were The Shyft Group's sales figures for 2020?
How much did The Shyft Group decrease its debt in 2020?
What is the earnings per share guidance for The Shyft Group in 2021?
What was The Shyft Group's adjusted EBITDA for 2020?
How much did The Shyft Group's backlog increase by at the end of 2020?
