shyf20230222_8k.htm
false 0000743238 0000743238 2023-02-23 2023-02-23
 
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): February 23, 2023
 
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
The NASDAQ Stock Market LLC
 
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 February 23, 2023, The Shyft Group, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 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 February 23, 2023 regarding the financial results for the quarter and year ended December 31, 2022.
 
99.2     Investor presentation dated February 23, 2023 regarding the financial results for the quarter and year ended December 31, 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: February 23, 2023
By:
/s/ Jonathan C. Douyard
 
   
Jonathan C. Douyard
 
   
Chief Financial Officer
 
 
 
 
 
ex_479590.htm

Exhibit 99.1

 

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The Shyft Group Reports Fourth Quarter and Full-Year 2022 Results

 

Reports Q4 sales of $302 million, growth of 9% versus prior year; Achieved record full year sales of $1.0 billion

Remain on target for Blue Arc Electric Vehicle (EV) production in the second half of 2023

Introduce 2023 outlook with sales of $1.0 to $1.2 billion; Adjusted EBITDA of $70 to $100 million, up 20% year-over-year at the midpoint

 

Novi, Mich., February 23, 2023 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 fourth quarter and full-year ending December 31, 2022.

 

Fourth Quarter 2022 Financial Highlights1

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

Sales of $302.0 million, an increase of $24.7 million, or 8.9%, from $277.3 million

Income from continuing operations of $17.8 million, or $0.50 per share, compared to $20.5 million, or $0.56 per share

Adjusted EBITDA of $30.7 million, or 10.2% of sales, an increase of $4.1 million, from $26.6 million, or 9.6% of sales; Results include $7.6 million of EV development costs versus $4.0 million in the prior year

Adjusted net income of $20.5 million, or $0.58 per share, compared to adjusted net income of $20.2 million, or $0.56 per share in the fourth quarter of 2021

Consolidated backlog of $832.7 million as of December 31, 2022, down $130.9 million, or 13.6%, compared to $963.6 million as of December 31, 2021

 

Full-Year 2022 Financial Highlights1

For the full-year 2022 compared to the full-year 2021:

Sales of $1.0 billion, an increase of $35.4 million, or 3.6%, from $991.8 million

Income from continuing operations of $36.6 million, or $1.03 per share, compared to $70.0 million, or $1.91 per share; The current year reflects an effective income tax rate of 16.8%

Adjusted EBITDA of $70.8 million, or 6.9% of sales, a decrease of $37.3 million, from $108.1 million, or 10.9% of sales; Results include $26.9 million of EV development costs versus $6.4 million in the prior year

Adjusted net income of $44.5 million, or $1.25 per share, compared to adjusted net income of $75.0 million, or $2.08 per share in 2021

Net leverage ratio of 0.93x times adjusted EBITDA as of December 31, 2022

 

“I am proud of The Shyft Group team’s ability to execute and close out the year strong, with solid growth in sales and adjusted EBITDA for the fourth quarter. We overcame dynamic challenges in our supply chain and inflationary pressures, remaining nimble and responsive to the needs of our customers while taking advantage of opportunities to invest in future growth,” said Daryl Adams, President and CEO.

 


1 Results reflected are for Continuing Operations; 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. 

 

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Fourth Quarter 2022 Business Segment Financial Highlights

 

Fleet Vehicles and Services (FVS)

Sales were $212.9 million for the fourth quarter of 2022, up 16.6% or $30.3 million year over year

Adjusted EBITDA for the fourth quarter of 2022 increased 5.6% to $27.7 million, or 13.0% of sales, compared to $26.2 million, or 14.4% of sales, a year ago

Segment backlog was $736.7 million as of December 31, 2022, down 14.3% compared to $859.4 million as of December 31, 2021

 

Specialty Vehicles (SV)

Sales were $93.2 million for the fourth quarter of 2022, a decrease of $1.5 million, or 1.5%, from $94.7 million a year ago

Adjusted EBITDA for the fourth quarter of 2022 was $15.9 million, or 17.1% of sales, an increase of $5.6 million, or 55.2%, from $10.3 million, or 10.8% of sales, a year ago

Segment backlog was $96.0 million as of December 31, 2022, down 7.8% compared to $104.1 million as of December 31, 2021

 

2023 Financial Outlook

“We are focused on delivering improved profitability in 2023. Current uncertainty surrounding broader macroeconomic conditions has led us to take a cautious approach to our outlook,” said Jon Douyard, Chief Financial Officer. “Our balance sheet strength and ample liquidity provide financial flexibility to fund operations and growth investments.”

 

Guidance for full-year 2023, notwithstanding further changes in the operating environment, is as follows:

 

Sales to be in the range of $1.0 billion to $1.2 billion

 

Adjusted EBITDA of $70 to $100 million

 

Net income of $28 to $50 million, with an income tax rate of approximately 25%

 

Earnings per share of $0.77 to $1.38

 

Adjusted earnings per share of $0.97 to $1.59

 

Capital expenditures of approximately $35 million

 

Free cash flow conversion ratio as a percent of net income greater than 100%

 

Adams concluded, “Our Blue Arc EV timeline remains on track with vehicle production planned for the second half of the year. We are differentiating the Shyft Group by investing in transformative initiatives that will deliver meaningful long-term growth and value for our customers and shareholders.”

 

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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: 10174805

 

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 include Blue Arc™ EV Solutions, Utilimaster®, Royal Truck Body™, DuraMag® and Magnum®, Strobes-R-Us™, Spartan RV Chassis™, Red Diamond™ Aftermarket Solutions, and Builtmore Contract Manufacturing™. 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 4,200 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 $1.0 billion in 2022. Learn more about The Shyft Group at TheShyftGroup.com.

 

This release contains information, including our sales and earnings guidance, all other information provided with respect to our outlook for 2023 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 Companys beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Companys control. It is possible that the Companys 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 Companys 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 Companys 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, 2022, 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.

 

Contact

Randy Wilson

Vice President, Investor Relations and Treasury

Randy.Wilson@theshyftgroup.com

248.727.3755

 

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The Shyft Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

   

December 31,

   

December 31,

 
   

2022

   

2021

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 11,548     $ 37,158  

Accounts receivable, less allowance of $246 and $187

    115,742       87,262  

Contract assets

    86,993       21,483  

Inventories

    100,161       67,184  

Other receivables - chassis pool agreements

    19,544       9,926  

Other current assets

    11,779       10,813  

Total current assets

    345,767       233,826  
                 

Property, plant and equipment, net

    70,753       61,057  

Right of use assets operating leases

    53,386       43,316  

Goodwill

    48,880       48,880  

Intangible assets, net

    49,078       52,981  

Net deferred tax asset

    10,390       4,880  

Other assets

    2,227       2,927  

TOTAL ASSETS

  $ 580,481     $ 447,867  

LIABILITIES AND SHAREHOLDERS' EQUITY

               

Current liabilities:

               

Accounts payable

  $ 124,309     $ 82,442  

Accrued warranty

    7,161       5,975  

Accrued compensation and related taxes

    14,434       19,064  

Contract liabilities

    5,255       988  

Operating lease liability

    10,888       7,934  

Other current liabilities and accrued expenses

    19,452       9,256  

Short-term debt - chassis pool agreements

    19,544       9,926  

Current portion of long-term debt

    189       252  

Total current liabilities

    201,232       135,837  
                 

Other non-current liabilities

    10,033       8,108  

Long-term operating lease liability

    44,256       36,329  

Long-term debt, less current portion

    56,266       738  

Total liabilities

    311,787       181,012  

Shareholders' equity:

               

Preferred stock, no par value: 2,000 shares authorized (none issued)

    -       -  

Common stock, no par value : 80,000 shares authorized; 35,066 and 35,416 outstanding

    92,982       95,375  

Retained earnings

    175,611       171,379  

Total The Shyft Group, Inc. shareholders' equity

    268,593       266,754  

Non-controlling interest

    101       101  

Total shareholders' equity

    268,694       266,855  

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

  $ 580,481     $ 447,867  

 

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The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

   

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

   

December 31,

 
   

2022

   

2021

   

2022

   

2021

 

Sales

  $ 302,011     $ 277,300     $ 1,027,164     $ 991,792  

Cost of products sold

    243,723       225,985       846,731       792,527  

Gross profit

    58,288       51,315       180,433       199,265  
                                 

Operating expenses:

                               

Research and development

    5,783       4,237       25,324       8,541  

Selling, general and administrative

    29,155       28,027       107,600       106,672  

Total operating expenses

    34,938       32,264       132,924       115,213  
                                 

Operating income

    23,350       19,051       47,509       84,052  
                                 

Other income (expense):

                               

Interest expense

    (1,079 )     (104 )     (2,833 )     (414 )

Other income (expense)

    (408

)

    99       (750

)

    842  

Total other income (expense)

    (1,487 )     (5 )     (3,583 )     428  

Income from continuing operations before income taxes

    21,863       19,046       43,926       84,480  
                                 

Income tax expense (benefit)

    4,022       (1,446 )     7,368       14,506  
                                 

Income from continuing operations

    17,841       20,492       36,558       69,974  
                                 

Income from discontinued operations, net of income taxes

    -       100       -       181  
                                 

Net income

    17,841       20,592       36,558       70,155  
                                 

Less: net income attributable to non-controlling interest

    -       128       -       1,230  
                                 

Net income attributable to The Shyft Group, Inc.

  $ 17,841     $ 20,464     $ 36,558     $ 68,925  
                                 
                                 

Basic earnings per share

                               

Continuing operations

  $ 0.51     $ 0.58     $ 1.04     $ 1.94  

Discontinued operations

    -       -       -       0.01  

Basic earnings per share

  $ 0.51     $ 0.58     $ 1.04     $ 1.95  
                                 

Diluted net earnings per share

                               

Continuing operations

  $ 0.50     $ 0.56     $ 1.03     $ 1.91  

Discontinued operations

    -       -       -       -  

Diluted earnings per share

  $ 0.50     $ 0.56     $ 1.03     $ 1.91  
                                 

Basic weighted average common shares outstanding

    35,067       35,341       35,073       35,333  
                                 

Diluted weighted average common shares outstanding

    35,443       36,185       35,494       36,097  

 

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The Shyft Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands, except par value)

(Unaudited)

 

   

Year Ended December 31,

 
   

2022

   

2021

 

Cash flows from operating activities:

               

Net income

  $ 36,558     $ 70,155  

Adjustments to reconcile net income to net cash used in operating activities

               

Depreciation and amortization

    14,774       11,536  

Non-cash stock based compensation expense

    7,619       8,745  

Deferred income taxes

    (5,510

)

    880  

Loss (gain) on disposal of assets

    826       (110 )

Changes in accounts receivable and contract assets

    (93,989 )     (34,522 )

Changes in inventories

    (32,977 )     (20,756 )

Changes in accounts payable

    41,302       34,954  

Changes in accrued compensation and related taxes

    (4,630 )     1,930  

Changes in accrued warranty

    1,186       53  

Changes in other assets and liabilities

    15,998       1,324  

Net cash provided by (used in) operating activities

    (18,843 )     74,009  
                 

Cash flows from investing activities:

               

Purchases of property, plant and equipment

    (20,564 )     (23,002 )

Proceeds from sale of property, plant and equipment

    148       22  

Acquisition of business, net of cash acquired

    -       904  

Net cash used in investing activities

    (20,416 )     (22,076 )
                 

Cash flows from financing activities:

               

Proceeds from long-term debt

    145,000       45,000  

Payments on long-term debt

    (89,000 )     (67,400

)

Payments of debt issuance costs

    -       (1,360 )

Payments of dividends

    (7,148 )     (3,551 )

Purchase and retirement of common stock

    (26,789 )     (3,348 )

Issuance and vesting of stock incentive awards

    (8,414

)

    (2,949

)

Purchase of non-controlling interest

    -       (2,162

)

Net cash provided by (used in) financing activities

    13,649       (35,770 )
                 

Net increase (decrease) in cash and cash equivalents

    (25,610 )     16,163  

Cash and cash equivalents at beginning of year

    37,158       20,995  

Cash and cash equivalents at end of year

  $ 11,548     $ 37,158  

 

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The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Quarter Ended December 31, 2022 (in thousands of dollars)


 

    Business Segments          
   

Fleet Vehicles

   

Specialty

   

Eliminations &

         
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 202,257     $ -     $ -     $ 202,257  

Motorhome chassis sales

    -       37,030       -       37,030  

Other specialty vehicles sales

    -       51,562       (4,148

)

    47,414  

Aftermarket parts and accessories sales

    10,658       4,652       -       15,310  

Total Sales

  $ 212,915     $ 93,244     $ (4,148

)

  $ 302,011  
                                 

Adjusted EBITDA

  $ 27,704     $ 15,905     $ (12,924 )   $ 30,685  

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Quarter Ended December 31, 2021 (in thousands of dollars)


 

   

Business Segments

         
   

Fleet Vehicles

   

Specialty

   

Eliminations &

         
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 172,240     $ -     $ -     $ 172,240  

Motorhome chassis sales

    -       49,500       -       49,500  

Other specialty vehicles sales

    -       40,562       -       40,562  

Aftermarket parts and accessories sales

    10,364       4,634       -       14,998  

Total Sales

  $ 182,604     $ 94,696     $ -     $ 277,300  
                                 

Adjusted EBITDA

  $ 26,246     $ 10,251     $ (9,912 )   $ 26,585  

 

https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-ftr01.jpg
https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-ftr02.jpg

 

 

 

https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-hdr01.jpg
https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-hdr02.jpg

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Year Ended December 31, 2022 (in thousands of dollars)


 

   

Business Segments

         
   

Fleet Vehicles

   

Specialty

   

Eliminations &

         
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 605,253     $ -     $ -     $ 605,253  

Motorhome chassis sales

    -       175,030       -       175,030  

Other specialty vehicles sales

    -       191,882       (6,483

)

    185,399  

Aftermarket parts and accessories sales

    41,750       19,732       -       61,482  

Total Sales

  $ 647,003     $ 386,644     $ (6,483

)

  $ 1,027,164  
                                 

Adjusted EBITDA

  $ 65,719     $ 54,413     $ (49,339 )   $ 70,793  

 

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Year Ended December 31, 2021 (in thousands of dollars)


 

   

Business Segments

         
   

Fleet Vehicles

   

Specialty

   

Eliminations &

         
   

& Services

   

Vehicles

   

Other

   

Consolidated

 

Fleet vehicle sales

  $ 624,874     $ -     $ -     $ 624,874  

Motorhome chassis sales

    -       168,166       -       168,166  

Other specialty vehicles sales

    -       145,134       -       145,134  

Aftermarket parts and accessories sales

    34,558       19,060       -       53,618  

Total Sales

  $ 659,432     $ 332,360     $ -     $ 991,792  
                                 

Adjusted EBITDA

  $ 108,621     $ 32,668     $ (33,223 )   $ 108,066  

 

 

The Shyft Group, Inc. and Subsidiaries

Sales and Other Financial Information by Business Segment

(Unaudited)

 

Period End Backlog (amounts in thousands of dollars)


   

Dec. 31, 2022

   

Sept. 30, 2022

   

Jun. 30, 2022

   

Mar. 31, 2022

   

Dec. 31, 2021

 

Fleet Vehicles and Services

  $ 736,690     $ 915,135     $ 1,000,021     $ 1,148,700     $ 859,442  

Motorhome Chassis

    35,471       49,769       62,811       61,297       54,583  

Other Specialty Vehicles

    60,417       78,794       72,058       62,406       49,407  

Aftermarket Parts and Accessories

    135       206       293       296       127  

Total Specialty Vehicles

    96,023       128,769       135,162       123,999       104,117  
                                         

Total Backlog

  $ 832,713     $ 1,043,904     $ 1,135,183     $ 1,272,699     $ 963,559  

 

https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-ftr01.jpg
https://cdn.kscope.io/598f031a57baaf866c140c695ef217d8-ftr02.jpg

 

 

 

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 December 31,

   

Twelve Months Ended December 31,

 

The Shyft Group, Inc.

 

2022

   

% of
sales

   

2021

   

% of
sales

   

2022

   

% of
sales

   

2021

   

% of sales

 

Income from continuing operations

  $ 17,841       5.9 %   $ 20,492       7.4 %   $ 36,558       3.6 %   $ 69,974       7.0 %

Net (income) attributable to non-controlling interest

    -               (128 )             -               (1,230 )        

Add (subtract):

                                                               

Restructuring and other related charges

    243               -               757               505          

Acquisition related expenses and adjustments

    84               777               884               1,585          

Non-cash stock-based compensation expense

    2,697               2,174               7,619               8,745          

Non-recurring professional fees

    -               1,568               -               1,568          

Loss from liquidation of JV

    -               -               -               643          

Non-recurring tax benefits

    -               (4,392 )             -               (4,392 )        

Tax effect of adjustments

    (371 )             (266 )             (1,348 )             (2,429 )        

Adjusted net income

  $ 20,494       6.8 %   $ 20,225       7.3 %   $ 44,470       4.3 %   $ 74,969       7.6 %
                                                                 

Income from continuing operations

  $ 17,841       5.9 %   $ 20,492       7.4 %   $ 36,558       3.6 %   $ 69,974       7.1 %

Net (income) attributable to non-controlling interest

    -               (128 )             -               (1,230 )        

Add (subtract):

                                                               

Depreciation and amortization

    4,719               3,044               14,774               11,356          

Taxes on income

    4,022               (1,446 )             7,368               14,506          

Interest expense

    1,079               104               2,833               414          

EBITDA

  $ 27,661       9.2 %   $ 22,066       8.0 %   $ 61,533       6.0 %   $ 95,020       9.6 %
                                                                 

Add (subtract):

                                                               

Restructuring and other related charges

    243               -               757               505          

Acquisition related expenses and adjustments

    84               777               884               1,585          

Non-cash stock-based compensation expense

    2,697               2,174               7,619               8,745          

Non-recurring professional fees

    -               1,568               -               1,568          

Loss from liquidation of JV

    -               -               -               643          

Adjusted EBITDA

  $ 30,685       10.2 %   $ 26,585       9.6 %   $ 70,793       6.9 %   $ 108,066       10.9 %
                                                                 

Diluted net earnings per share

  $ 0.50             $ 0.56             $ 1.03             $ 1.91          

Add (subtract):

                                                               

Restructuring and other related charges

    0.01               -               0.02               0.01          

Acquisition related expenses and adjustments

    -               0.02               0.02               0.04          

Non-cash stock-based compensation expense

    0.08               0.07               0.21               0.24          

Non-recurring professional fees

    -               0.04               -               0.04          

Loss from liquidation of JV

    -               -               -               0.02          

Non-recurring tax benefits

    -               (0.12 )             -               (0.12 )        

Tax effect of adjustments

    (0.01 )             (0.01 )             (0.03 )             (0.06 )        

Adjusted diluted net earnings per share

  $ 0.58             $ 0.56             $ 1.25             $ 2.08          

 

 

 

 

The Shyft Group, Inc. and Subsidiaries

Consolidated Financial Summary (Non-GAAP)

(In thousands, except per share data)

(Unaudited)

 

   

Outlook *

 
   

Twelve Months Ended December 31, 2023

 

The Shyft Group, Inc.

 

Low

   

Mid

   

High

 

Income from continuing operations

  $ 27,562     $ 38,681     $ 49,800  

Add:

                       

Depreciation and amortization

    19,250       19,925       20,600  

Interest expense

    4,000       3,500       3,000  

Taxes

    9,188       12,894       16,600  

EBITDA

  $ 60,000     $ 75,000     $ 90,000  

Add:

                       

Non-cash stock-based compensation and other charges

    10,000       10,000       10,000  

Adjusted EBITDA

  $ 70,000     $ 85,000     $ 100,000  
                         

Earnings per share

  $ 0.77     $ 1.07     $ 1.38  

Add:

                       

Non-cash stock-based compensation and other charges

    0.28       0.28       0.28  

Less tax effect of adjustments

    (0.07 )     (0.07 )     (0.07 )

Adjusted earnings per share

  $ 0.97     $ 1.28     $ 1.59  

 

 

* Total amounts may not add due to rounding.

 

 

 
Image Exhibit

Exhibit 99.2

 

 

 

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