The Shyft Group Reports Record Third Quarter Results
The Shyft Group, a leader in specialty vehicle manufacturing, reported strong third-quarter results for 2021, with sales reaching $272.6 million, an increase of 34% year-over-year. Gross profit margin fell to 20.6% due to higher material and labor costs. Income from continuing operations was $21 million, or $0.58 per share, alongside an adjusted EBITDA of $33.7 million. A record backlog of $852.6 million reflects robust demand, including a significant USPS order. The company has raised its full-year guidance, anticipating revenue between $930 million to $970 million.
- Sales increased by $69.1 million, or 34% year-over-year.
- Record backlog at $852.6 million, up 203.8% from the previous year.
- Cash generation improved to $39.1 million, a 19.5% increase.
- Raised full-year revenue guidance to $930-$970 million.
- Gross profit margin decreased to 20.6% from 24.9% due to unfavorable product mix and rising costs.
- Adjusted EBITDA margin fell to 12.4% from 16.0% year-over-year.
NOVI, Mich., Nov. 4, 2021 /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, 2021.
Third Quarter 2021 Highlights from Continuing Operations1
For the third quarter of 2021 compared to the third quarter of 2020:
- Sales of
$272.6 million , an increase of$69.1 million , or34.0% , from$203.5 million , reflecting increased sales in all product categories. - Gross profit margin of
20.6% of sales compared to24.9% of sales, reflecting unfavorable product mix and higher material and labor costs. - Income from continuing operations of
$21.0 million , or$0.58 per share, compared to$19.4 million , or$0.54 per share. - Adjusted EBITDA of
$33.7 million , or12.4% of sales, an increase of$1.1 million , or3.5% , from$32.6 million , or16.0% of sales. - Adjusted net income of
$22.9 million , or$0.63 per share, an increase of$0.8 million , or3.2% , from$22.1 million , or$0.62 per share. - Generated
$39.1 million of cash provided from operating activities, an increase of$6.4 million , or19.5% from$32.7 million . - Consolidated backlog at September 30, 2021, was a record
$852.6 million , up$572.0 million , or203.8% , compared to$280.6 million at September 30, 2020. - Opened Shyft Innovations Research and Development Center, a 40,000 square-foot facility, focused on driving advancements in both mobility and alternative propulsion, including an all-electric chassis platform currently under development.
________________________________ |
1 The Company divested its Emergency Response (ER) business effective February 1, 2020. 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. |
"Our record financial performance in the third quarter marked a continuation of what we have been achieving since the beginning of the year," said Daryl Adams, President and Chief Executive Officer. "Our team's resourcefulness and relentless focus on execution and the customer, despite industry-wide supply chain challenges, enabled our growth momentum to continue, while also positioning us for a remarkable year."
Fleet Vehicles and Services (FVS)
FVS segment sales totaled
Adjusted EBITDA increased
The segment backlog at September 30, 2021, totaled a record
Specialty Vehicles (SV)
SV segment sales were
Adjusted EBITDA was
The segment backlog at September 30, 2021, totaled
Outlook for Remainder of 2021
"Our excellent performance during the quarter, including strong cash generation, has enabled us to pay down our debt entirely and raise 2021 guidance," said Jon Douyard, Chief Financial Officer. "Our strong balance sheet coupled with a growing backlog, will further support our continued growth."
The Company's guidance for the 2021 full year is as follows:
- Revenue to be in the range of
$930.0 to$970.0 million - Income from continuing operations of
$59.9 to$61.3 million - Adjusted EBITDA of
$108.0 to$110.0 million - Effective tax rate of approximately
26% - Earnings per share of
$1.66 -$1.70 - Adjusted earnings per share of
$1.97 -$2.01
"Our year-to-date results really speak to our stability, nimbleness and the resulting momentum that will serve us well to finish the year strong," said Adams. "We continue to invest in new products and technologies and we are making significant progress on our custom EV chassis, which will further differentiate our company and boost our competitive position, while delivering a much-needed product to our customers."
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. EDT today to discuss these results and current business trends. The conference call and webcast will be available via:
Webcast: www.TheShyftGroup.com/investor-relations/webcasts
Conference Call: 1-877-317-6789 (domestic) or 412-317-6789 (international); passcode: 10155595
For more information about The Shyft Group, 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 include 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 3,000 associates 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 statements concerning our business, strategic position, financial projections, financial strength, future plans, objectives, and the performance of our products and operations. 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 document relating to the global outbreak of the novel coronavirus disease (COVID-19), 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
The Shyft Group
(517) 997-3862
The Shyft Group, Inc. and Subsidiaries | ||||||
Consolidated Balance Sheets | ||||||
(In thousands, except par value) | ||||||
(Unaudited) | ||||||
September 30, | December 31, | |||||
2021 | 2020 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 14,549 | $ 20,995 | ||||
Accounts receivable, less allowance of | 67,607 | 64,695 | ||||
Contract assets | 42,459 | 9,414 | ||||
Inventories, net | 81,901 | 46,428 | ||||
Other receivables - chassis pool agreements | 3,995 | 6,503 | ||||
Other current assets | 8,569 | 8,172 | ||||
Total current assets | 219,080 | 156,207 | ||||
Property, plant and equipment, net | 57,374 | 45,734 | ||||
Right of use assets – operating leases | 44,303 | 43,430 | ||||
Goodwill | 48,881 | 49,481 | ||||
Intangible assets, net | 53,832 | 56,386 | ||||
Other assets | 1,180 | 2,052 | ||||
Net deferred tax asset | 5,625 | 5,759 | ||||
TOTAL ASSETS | $ 430,275 | $ 359,049 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ 89,601 | $ 47,487 | ||||
Accrued warranty | 7,548 | 5,633 | ||||
Accrued compensation and related taxes | 18,045 | 17,134 | ||||
Deposits from customers | 2,148 | 756 | ||||
Operating lease liability | 7,632 | 7,508 | ||||
Other current liabilities and accrued expenses | 10,631 | 8,121 | ||||
Short-term debt - chassis pool agreements | 3,995 | 6,503 | ||||
Current portion of long-term debt | 238 | 221 | ||||
Total current liabilities | 139,838 | 93,363 | ||||
Other non-current liabilities | 5,095 | 5,447 | ||||
Long-term operating lease liability | 37,532 | 36,662 | ||||
Long-term debt, less current portion | 694 | 23,418 | ||||
Total liabilities | 183,159 | 158,890 | ||||
Shareholders' equity: | ||||||
Preferred stock; 2,000 shares authorized (none issued) | - | - | ||||
Common stock; 80,000 shares authorized; 35,342 and 35,344 outstanding | 94,312 | 91,044 | ||||
Retained earnings | 151,873 | 109,286 | ||||
Total The Shyft Group, Inc. shareholders' equity | 246,185 | 200,330 | ||||
Non-controlling interest | 931 | (171) | ||||
Total shareholders' equity | 247,116 | 200,159 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 430,275 | $ 359,049 | ||||
The Shyft Group, Inc. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Sales | $ | 272,622 | $ | 203,473 | $ | 714,492 | $ | 504,391 | ||||||||
Cost of products sold | 216,564 | 152,723 | 566,542 | 393,335 | ||||||||||||
Gross profit | 56,058 | 50,750 | 147,950 | 111,056 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 2,582 | 824 | 4,304 | 3,496 | ||||||||||||
Selling, general and administrative | 25,368 | 23,525 | 78,645 | 69,534 | ||||||||||||
Total operating expenses | 27,950 | 24,349 | 82,949 | 73,030 | ||||||||||||
Operating income | 28,108 | 26,401 | 65,001 | 38,026 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (253) | (11) | (310) | (1,202) | ||||||||||||
Interest and other income | 54 | 238 | 743 | 243 | ||||||||||||
Total other income (expense) | (199) | 227 | 433 | (959) | ||||||||||||
Income from continuing operations before income taxes | 27,909 | 26,628 | 65,434 | 37,067 | ||||||||||||
Income tax expense | 6,910 | 7,253 | 15,952 | 7,084 | ||||||||||||
Income from continuing operations | 20,999 | 19,375 | 49,482 | 29,983 | ||||||||||||
Income (loss) from discontinued operations, net of income taxes | - | (926) | 81 | (4,947) | ||||||||||||
Net income | 20,999 | 18,449 | 49,563 | 25,036 | ||||||||||||
Less: net income attributable to non-controlling interest | 77 | 41 | 1,102 | 178 | ||||||||||||
Net income attributable to The Shyft Group Inc. | $ | 20,922 | $ | 18,408 | $ | 48,461 | $ | 24,858 | ||||||||
Basic earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.59 | $ | 0.55 | $ | 1.37 | $ | 0.84 | ||||||||
Discontinued operations | - | (0.03) | - | (0.14) | ||||||||||||
Basic earnings (loss) per share | $ | 0.59 | $ | 0.52 | $ | 1.37 | $ | 0.70 | ||||||||
Diluted earnings (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.58 | $ | 0.54 | $ | 1.34 | $ | 0.83 | ||||||||
Discontinued operations | - | (0.03) | - | (0.14) | ||||||||||||
Diluted earnings (loss) per share | $ | 0.58 | $ | 0.51 | $ | 1.34 | $ | 0.69 | ||||||||
Basic weighted average common shares outstanding | 35,346 | 35,559 | 35,330 | 35,491 | ||||||||||||
Diluted weighted average common shares outstanding | 36,074 | 35,989 | 36,024 | 35,794 | ||||||||||||
The Shyft Group, Inc. and Subsidiaries | |||||||||||||||||||||
Sales and Other Financial Information by Business Segment | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended September 30, 2021 (in thousands of dollars) | |||||||||||||||||||||
Business Segments | |||||||||||||||||||||
Fleet Vehicles & | Specialty | Other | Consolidated | ||||||||||||||||||
Fleet vehicle sales | $ 189,591 | $ - | $ - | $ 189,591 | |||||||||||||||||
Motorhome chassis sales | - | 42,507 | - | 42,507 | |||||||||||||||||
Other specialty chassis and vehicles | - | 26,620 | - | 26,620 | |||||||||||||||||
Aftermarket parts and assemblies | 8,949 | 4,955 | - | 13,904 | |||||||||||||||||
Total Sales | $ 198,540 | $ 74,082 | $ - | $ 272,622 | |||||||||||||||||
Adjusted EBITDA | $ 36,813 | $ 5,827 | $ (8,900) | $ 33,740 | |||||||||||||||||
The Shyft Group, Inc. and Subsidiaries | |||||||||||||||||
Sales and Other Financial Information by Business Segment | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended September 30, 2020 (in thousands of dollars) | |||||||||||||||||
Business Segments | |||||||||||||||||
Fleet Vehicles & | Specialty | Other | Consolidated | ||||||||||||||
Fleet vehicle sales | $ 136,382 | $ - | $ - | $ 136,382 | |||||||||||||
Motorhome chassis sales | - | 38,190 | - | 38,190 | |||||||||||||
Other specialty chassis and vehicles | - | 17,601 | - | 17,601 | |||||||||||||
Aftermarket parts and assemblies | 8,808 | 2,492 | - | 11,300 | |||||||||||||
Total Sales | $ 145,190 | $ 58,283 | $ - | $ 203,473 | |||||||||||||
Adjusted EBITDA | $ 33,237 | $ 7,183 | $ (7,827) | $ 32,593 | |||||||||||||
Sales and Other Financial Information by Business Segment | ||||||||||
(Unaudited) | ||||||||||
Period End Backlog (amounts in thousands of dollars) | ||||||||||
Sept. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sept. 30, 2020 | ||||||
Fleet Vehicles and Services | $ 758,518 | $ 660,908 | $ 589,604 | $ 427,338 | $ 228,870 | |||||
Motorhome Chassis | 60,978 | 56,294 | 42,742 | 31,580 | 40,387 | |||||
Other Vehicles | 32,717 | 33,840 | 33,716 | 19,431 | 11,036 | |||||
Aftermarket Parts and Accessories | 347 | 382 | 438 | 302 | 333 | |||||
Total Specialty Vehicles | 94,042 | 90,516 | 76,896 | 51,313 | 51,756 | |||||
Total Backlog* | $ 852,560 | $ 751,424 | $ 666,500 | $ 478,651 | $ 280,626 | |||||
*Backlog orders are expected to be filled within one year as of September 30, 2021. | ||||||||||
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 (Non-GAAP) | ||||||||||
(In thousands, except per share data) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended September 30, | ||||||||||
The Shyft Group, Inc. | 2021 | % of | 2020 | % of | ||||||
Income from continuing operations | $ 20,999 | $ 19,375 | ||||||||
Net (income) attributable to non-controlling interest | (77) | (41) | ||||||||
Add (subtract): | ||||||||||
Restructuring and other related charges | - | 303 | ||||||||
Acquisition related expenses and adjustments | 594 | 650 | ||||||||
Non-cash stock-based compensation expense | 2,079 | 2,064 | ||||||||
Accelerated depreciation of property, plant and equipment | - | 365 | ||||||||
Deferred tax assets valuation allowance | - | 275 | ||||||||
Tax effect of adjustments | (733) | (842) | ||||||||
Adjusted net income | $ 22,862 | $ 22,149 | ||||||||
Income from continuing operations | $ 20,999 | $ 19,375 | ||||||||
Net (income) attributable to non-controlling interest | (77) | (41) | ||||||||
Add (subtract): | ||||||||||
Depreciation and amortization | 2,982 | 2,978 | ||||||||
Taxes on income | 6,910 | 7,253 | ||||||||
Interest expense | 253 | 11 | ||||||||
EBITDA | $ 31,067 | $ 29,576 | ||||||||
Add (subtract): | ||||||||||
Restructuring and other related charges | - | 303 | ||||||||
Acquisition related expenses and adjustments | 594 | 650 | ||||||||
Non-cash stock-based compensation expense | 2,079 | 2,064 | ||||||||
Adjusted EBITDA | $ 33,740 | $ 32,593 | ||||||||
Diluted net earnings per share | $ 0.58 | $ 0.54 | ||||||||
Add (subtract): | ||||||||||
Restructuring and other related charges | - | 0.01 | ||||||||
Acquisition related expenses and adjustments | 0.01 | 0.02 | ||||||||
Non-cash stock-based compensation expense | 0.06 | 0.05 | ||||||||
Accelerated depreciation of property, plant and equipment | - | 0.01 | ||||||||
Deferred tax asset valuation allowance | - | 0.01 | ||||||||
Tax effect of adjustments | (0.02) | (0.02) | ||||||||
Adjusted diluted net earnings per share | $ 0.63 | $ 0.62 | ||||||||
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 | $ 59,886 | $ 60,576 | $ 61,266 | ||||
Add: | |||||||
Depreciation and amortization | 11,891 | 11,891 | 11,891 | ||||
Interest expense | 578 | 578 | 578 | ||||
Taxes | 20,906 | 21,216 | 21,526 | ||||
EBITDA | $ 93,261 | $ 94,261 | $ 95,261 | ||||
Add (subtract): | |||||||
Non-cash stock-based compensation and other charges | 14,739 | 14,739 | 14,739 | ||||
Adjusted EBITDA | $ 108,000 | $ 109,000 | $ 110,000 | ||||
Earnings per share | $ 1.66 | $ 1.68 | $ 1.70 | ||||
Add: | |||||||
Non-cash stock-based compensation and other charges | 0.41 | 0.41 | 0.41 | ||||
Less tax effect of adjustments | (0.10) | (0.10) | (0.10) | ||||
Adjusted earnings per share | $ 1.97 | $ 1.99 | $ 2.01 | ||||
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SOURCE The Shyft Group, Inc.
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