NOVI, Mich., July 28, 2022 (GLOBE NEWSWIRE) -- 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 second quarter ending June 30, 2022.

Second Quarter 2022 Financial Highlights from Continuing Operations¹

For the second quarter of 2022 compared to the second quarter of 2021:

Sales of $232.2 million, a decrease of $11.8 million, or 4.8%, from $244.0 million.
Income from continuing operations of $5.3 million, or $0.15 per share, compared to income from continuing operations of $17.0 million, or $0.44 per share.
Adjusted EBITDA of $13.7 million, or 5.9% of sales, a decrease of $14.9 million, from $28.6 million, or 11.7% of sales. Results include $7.0 million of EV development costs.
Adjusted net income of $7.5 million, or $0.21 per share, compared to adjusted net income of $19.0 million, or $0.53 per share in the second quarter of 2021.
Consolidated backlog at June 30, 2022, totaled $1.1 billion, up $383.8 million, or 51.1%, compared to $751.4 million at June 30, 2021, reflecting continued strong demand across all business units.

"The Shyft Group continued to manage supply chain disruptions in the second quarter with results in line with our expectations. The Specialty Vehicles team executed well and produced solid results, while we also saw chassis deliveries in our Fleet Vehicle Services business improve steadily as the quarter progressed," said Daryl Adams, President and Chief Executive Officer. "We also continued to hit key development milestones with our electrification products and remain on track for production in mid-2023."

Fleet Vehicles and Services (FVS)

FVS segment sales were $136.9 million, a decrease of $24.7 million, or 15.3%, from $161.6 million due to decreased volume related in large part to reduced OEM chassis availability, partially offset by pricing actions.

Adjusted EBITDA was $14.5 million, or 10.6% of sales, compared to $28.1 million, or 17.4% of sales, a year ago. The decrease was primarily driven by lower volume and productivity inefficiencies as a result of intermittent chassis supply, material and labor cost inflation, partially offset by pricing actions and mix.

The segment backlog at June 30, 2022, totaled $1.0 billion and was up 53.2% compared to $652.6 million at June 30, 2021.

¹ The Company divested its Emergency Response Vehicles (ERV) business effective February 1, 2020. Accordingly, the financial results of ERV have been classified as discontinued operations for all periods presented. Unless otherwise noted, financial results presented are based on continuing operations.

Specialty Vehicles (SV)

SV segment sales were $95.3 million, an increase of $12.9 million, or 15.7%, from $82.4 million a year ago. This was due to continued strong performance in luxury motorhome chassis and service body sales as well as the impact of pricing actions.

Adjusted EBITDA was $12.9 million, or 13.5% of sales, an increase of $4.1 million, or 46.0%, from $8.8 million, or 10.7% of sales, a year ago. The increase was primarily due to higher sales volume, pricing actions and improved product mix, partially offset by material and labor cost inflation.

The segment backlog as of June 30, 2022, totaled $135.2 million and was up 36.8% compared to $98.8 million at June 30, 2021.

2022 Outlook

"As anticipated, our second quarter started off slow, but progressively improved as OEM chassis deliveries increased throughout the quarter," said Jon Douyard, Chief Financial Officer. "Given our second quarter performance, along with increased visibility into chassis supply, strong customer demand, and a healthy balance sheet, we believe that we are on track to deliver our improved full year guidance."

Guidance for full-year 2022, notwithstanding further chassis and supply chain related issues, is as follows:

Revenue to be in the range of $925 million to $1.1 billion
Adjusted EBITDA of $55 to $80 million, including $30 million of expenses related to EV development
Income from continuing operations of $21 to $41 million
Earnings per share of $0.59 to $1.15
Adjusted earnings per share of $0.85 to $1.41

Adams concluded, "We remain excited about our long-term business prospects, our capabilities, and our team. Our financial strength positions us well to invest in innovation and meet the evolving needs of our customers despite the current industry wide challenges. The team is laser focused on executing our growth strategy and driving long-term value for customers, employees, and shareholders."

Conference Call and Webcast Information

The Shyft Group will host a conference call 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

Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international); passcode: 10163194

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 family of brands includes Blue Arc™ EV Solutions, 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 3,800 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 of $992 million in 2021. Learn more about The Shyft Group at TheShyftGroup.com.

This release contains information, including our revenue and earnings guidance, all other information provided with respect to our outlook for 2022 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, anticipated disruptions to our operations and industry due to the COVID-19 pandemic, 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 December 31, 2021, and those described from time to time in our future reports filed 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.

The Shyft Group, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
	June 30,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	6,607	$	37,158
Accounts receivable, less allowance of $162 and $187		79,241		87,262
Contract assets		42,368		21,483
Inventories, net		102,010		67,184
Other receivables - chassis pool agreements		23,636		9,926
Other current assets		13,698		10,813
Total current assets		267,560		233,826

Property, plant and equipment, net		66,169		61,057
Right of use assets – operating leases		54,426		43,316
Goodwill		48,880		48,880
Intangible assets, net		51,029		52,981
Net deferred tax asset		5,312		4,880
Other assets		1,637		2,927
TOTAL ASSETS	$	495,013	$	447,867
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	90,259	$	82,442
Accrued warranty		5,596		5,975
Accrued compensation and related taxes		12,918		19,064
Contract liabilities		1,359		988
Operating lease liability		9,706		7,934
Other current liabilities and accrued expenses		9,856		9,256
Short-term debt - chassis pool agreements		23,636		9,926
Current portion of long-term debt		192		252
Total current liabilities		153,522		135,837

Other non-current liabilities		7,004		8,108
Long-term operating lease liability		46,188		36,329
Long-term debt, less current portion		55,263		738
Total liabilities		261,977		181,012
Shareholders' equity:
Preferred stock, no par value: 2,000 shares authorized (none issued)		-		-
Common stock, no par value : 80,000 shares authorized; 35,063 and 35,416 outstanding		88,894		95,375
Retained earnings		144,041		171,379
Total The Shyft Group, Inc. shareholders' equity		232,935		266,754
Non-controlling interest		101		101
Total shareholders' equity		233,036		266,855
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	495,013	$	447,867

The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
			2022			2021			2022			2021
	Sales	$	232,195		$	243,982		$	439,078		$	441,870
	Cost of products sold		190,077			192,076			371,029			349,978

	Gross profit		42,118			51,906			68,049			91,892

	Operating expenses:
	Research and development		7,563			940			12,490			1,722
	Selling, general and administrative		26,860			28,740			53,412			53,277

	Total operating expenses		34,423			29,680			65,902			54,999

	Operating income		7,695			22,226			2,147			36,893

	Other income (expense):
	Interest expense		(463	)		(227	)		(617	)		(57	)
	Other income (expense)		(488	)		506			(523	)		689

	Total other income (expense)		(951	)		279			(1,140	)		632

	Income from continuing operations before income taxes		6,744			22,505			1,007			37,525

	Income tax expense (benefit)		1,461			5,552			(424	)		9,042

	Income from continuing operations		5,283			16,953			1,431			28,483

	Income from discontinued operations, net of income taxes		-			-			-			81

	Net income		5,283			16,953			1,431			28,564

	Less: net income attributable to non-controlling interest		-			990			-			1,025

Net income attributable to The Shyft Group, Inc.		$	5,283		$	15,963		$	1,431		$	27,539


	Basic earnings per share
	Continuing operations	$	0.15		$	0.45		$	0.04		$	0.78
	Discontinued operations		-			-			-			-

	Basic earnings per share	$	0.15		$	0.45		$	0.04		$	0.78

	Diluted net earnings per share
	Continuing operations	$	0.15		$	0.44		$	0.04		$	0.76
	Discontinued operations		-			-			-			-

	Diluted earnings per share	$	0.15		$	0.44		$	0.04		$	0.76

Basic weighted average common shares outstanding			35,049			35,333			35,078			35,322


Diluted weighted average common shares outstanding			35,243			36,190			35,437			36,191

The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands, except par value)

(Unaudited)

	Six Months Ended June 30,
		2022			2021
Cash flows from operating activities:
Net income	$	1,431		$	28,564
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization		6,696			5,330
Non-cash stock based compensation expense		3,708			4,492
Deferred income taxes		(432	)		134
Loss (gain) on disposal of assets		481			(105	)
Changes in accounts receivable and contract assets		(12,863	)		(42,639	)
Changes in inventories		(34,826	)		(21,992	)
Changes in accounts payable		7,333			27,721
Changes in accrued compensation and related taxes		(6,146	)		665
Changes in accrued warranty		(379	)		989
Changes in other assets and liabilities		(1,672	)		69
Net cash provided by (used in) operating activities		(36,669	)		3,228

Cash flows from investing activities:
Purchases of property, plant and equipment		(10,010	)		(12,373	)
Proceeds from sale of property, plant and equipment		148			15
Acquisition of business, net of cash acquired		-			404

Net cash used in investing activities		(9,862	)		(11,954	)

Cash flows from financing activities:
Proceeds from long-term debt		85,000			15,000
Payments on long-term debt		(30,000	)		(15,000	)
Payments of dividends		(3,640	)		(1,776	)
Purchase and retirement of common stock		(26,789	)		(3,348	)
Issuance and vesting of stock incentive awards		(8,591	)		(2,967	)
Net cash provided by (used in) financing activities		15,980			(8,091	)

Net decrease in cash and cash equivalents		(30,551	)		(16,817	)
Cash and cash equivalents at beginning of year		37,158			20,995

Cash and cash equivalents at end of year	$	6,607		$	4,178

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

Quarter Ended June 30, 2022 (in thousands of dollars)

		Business Segments
		Fleet Vehicles		Specialty
		& Services		Vehicles		Other			Consolidated
Fleet vehicle sales	$	126,181	$	-	$	-		$	126,181
Motorhome chassis sales		-		42,710		-			42,710
Other specialty vehicles sales		-		47,044		-			47,044
Aftermarket parts and accessories sales		10,716		5,544		-			16,260

Total Sales	$	136,897	$	95,298	$	-		$	232,195

Adjusted EBITDA	$	14,525	$	12,859	$	(13,695	)	$	13,689

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

Quarter Ended June 30, 2021 (in thousands of dollars)

		Business Segments
		Fleet Vehicles		Specialty
		& Services		Vehicles		Other			Consolidated
Fleet vehicle sales	$	153,171	$	-	$	-		$	153,171
Motorhome chassis sales		-		40,891		-			40,891
Other specialty vehicles sales		-		36,070		-			36,070
Aftermarket parts and accessories sales		8,447		5,403		-			13,850

Total Sales	$	161,618	$	82,364	$	-		$	243,982

Adjusted EBITDA	$	28,116	$	8,808	$	(8,354	)	$	28,570

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

Period End Backlog (amounts in thousands of dollars)

		Jun. 30, 2022		Mar. 31, 2022		Dec. 31, 2021		Sept. 30, 2021	Jun. 30, 2021
Fleet Vehicles and Services	$	1,000,021	$	1,148,700	$	859,442	$	749,731	$	652,642
Motorhome Chassis		62,811		61,297		54,583		60,978		56,294
Other Specialty Vehicles		72,058		62,406		49,407		41,504		42,106
Aftermarket Parts and Accessories		293		296		127		347		382

Total Specialty Vehicles		135,162		123,999		104,117		102,829		98,782

Total Backlog	$	1,135,183	$	1,272,699	$	963,559	$	852,560	$	751,424

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.

The Shyft Group, Inc. and Subsidiaries

Consolidated Financial Summary (Non-GAAP)

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,
The Shyft Group, Inc.		2022		% of sales			2021		% of sales
Income from continuing operations	$	5,283		2.3	%	$	16,953		6.9	%
Net (income) attributable to non-controlling interest		-					(990	)
Add (subtract):
Restructuring and other related charges		354					505
Acquisition related expenses and adjustments		341					71
Non-cash stock-based compensation expense		2,060					2,850
Loss from liquidation of JV							643
Tax effect of adjustments		(496	)				(998	)
Adjusted net income	$	7,542		3.2	%	$	19,034		7.8	%

Income from continuing operations	$	5,283		2.3	%	$	16,953		6.9	%
Net (income) attributable to non-controlling interest		-					(990	)
Add (subtract):
Depreciation and amortization		3,727					2,759
Income tax expense		1,461					5,552
Interest expense		463					227
EBITDA	$	10,934		4.7	%	$	24,501		10.0	%
Add:
Restructuring and other related charges		354					505
Acquisition related expenses and adjustments		341					71
Non-cash stock-based compensation expense		2,060					2,850
Loss from liquidation of JV		-					643
Adjusted EBITDA	$	13,689		5.9	%	$	28,570		11.7	%

Diluted net earnings per share	$	0.15				$	0.44
Add (subtract):
Restructuring and other related charges		0.01					-
Acquisition related expenses and adjustments		0.01					-
Non-cash stock-based compensation expense		0.05					0.08
Loss from liquidation of JV							0.01
Tax effect of adjustments		(0.01	)				-
Adjusted diluted net earnings per share	$	0.21				$	0.53

The Shyft Group, Inc. and Subsidiaries
Consolidated Financial Summary (Non-GAAP)
(In thousands, except per share data)
(Unaudited)

	Forecast
	Twelve Months Ended December 31, 2022
The Shyft Group, Inc.	Low			Mid			High
Income from continuing operations	$	21,097		$	31,116		$	41,135
Add:
Depreciation and amortization		13,582			13,582			13,582
Interest expense		1,500			1,250			1,000
Taxes		6,481			9,212			11,943
EBITDA	$	42,660		$	55,160		$	67,660
Add:
Non-cash stock-based compensation and other charges		12,340			12,340			12,340
Adjusted EBITDA	$	55,000		$	67,500		$	80,000

Earnings per share	$	0.59		$	0.87		$	1.15
Add:
Non-cash stock-based compensation and other charges		0.34			0.34			0.34
Less tax effect of adjustments		(0.08	)		(0.08	)		(0.08	)
Adjusted earnings per share	$	0.85		$	1.13		$	1.41

CONTACT:

Randy Wilson

Vice President, Investor Relations and Treasury

Cell: 248.727.3755

Email: Randy.Wilson@theshyftgroup.com

The Shyft Group Reports Second Quarter 2022 Results