false 0000743238 0000743238 2022-07-28 2022-07-28

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): July 28, 2022

 

THE SHYFT GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Michigan (State or Other Jurisdiction of Incorporation)	001-33582 (Commission File No.)	38-2078923 (IRS Employer Identification No.)
	41280 Bridge Street, Novi, Michigan (Address of Principal Executive Offices)	48375 (Zip Code)

 

517-543-6400

(Registrant's Telephone Number, Including Area Code)

 

Not Applicable

(Former Name or Former Address, if changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	SHYF	NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

---

 

 

Item 2.02     Results of Operations and Financial Condition

 

On July 28, 2022, The Shyft Group, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2022, along with an accompanying investor presentation. Copies of the press release and investor presentation are attached to this Current Report as Exhibits 99.1 and 99.2.

 

The information in this Item 2.02 and the attached Exhibits 99.1 and 99.2 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01     Financial Statements and Exhibits

 

(d) Exhibits

 

99.1	Press Release dated July 28, 2022 regarding the financial results for the quarter ended June 30, 2022.
99.2	Investor presentation dated July 28, 2022 regarding the financial results for the quarter ended June 30, 2022.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	THE SHYFT GROUP, INC.
Dated: July 28, 2022	By:	/s/ Jonathan C. Douyard
		Jonathan C. Douyard
		Chief Financial Officer

 

 

Exhibit 99.1

 

41280 Bridge St, Novi, MI 48375 THESHYFTGROUP.COM

 

 

The Shyft Group Reports Second Quarter 2022 Results

 

Delivered $0.15 of EPS; Raised mid-point of outlook as chassis flow improved; Backlog remains strong; Continued progress on Blue Arc EV initiative

 

Novi, Mich., July 28, 2022 – 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.the shyftgroup.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

 

 

 

Exhibit 99.2