Shyft Group Reports Q3 Sales Up 5%, Backlog at $1 Billion

NOVI, Mich. – The Shyft Group, Inc. (NASDAQ: SHYF), a 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 Sept. 30.

Third Quarter 2022 Financial Highlights¹

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

• Sales of $286.1 million, an increase of $13.5 million, or 4.9%, from $272.6 million.
• Earnings of $17.3 million, or $0.49 per share, compared to $21.0 million, or $0.58 per share.
• Adjusted EBITDA of $27.1 million, or 9.5% of sales, a decrease of $6.6 million, from $33.7 million, or 12.4% of sales. Results include $7.7 million of EV development costs.
• Adjusted net income of $18.6 million, or $0.53 per share, compared to adjusted net income of $22.9 million, or $0.63 per share in the third quarter of 2021.
• Consolidated backlog at Sept. 30, totaled $1.0 billion, up $191.3 million, or 22.4%, compared to $852.6 million at September 30, 2021, reflecting continued strong demand across all business units.
• Secured initial pre-order for Blue Arc™ Electric Delivery Walk-In Vans from Randy Marion Dealer Group of 2,000-units.

“I am incredibly proud of the Shyft Group team as we delivered positive operating results, with strong execution in an environment that remains highly dynamic and challenging. The Specialty Vehicles business produced record profitability while Fleet Vehicles and Services improved sequentially as chassis availability returned to more healthy levels,” said Daryl Adams, President and Chief Executive Officer. “The excitement around our Blue Arc Solutions remains extremely high as demonstrated by our initial pre-order and positive customer feedback. We are pleased with our progress to date and believe we are on-track for mid-2023 production.”

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.

Fleet Vehicles and Services (FVS)

FVS segment sales were $184.5 million, a decrease of $6.9 million, or 3.6%, from $191.4 million due to lower volume.

Adjusted EBITDA was $24.4 million, or 13.2% of sales, compared to $36.4 million, or 19.0% of sales, a year ago. The decrease was primarily driven by lower volume and production inefficiencies due to supply chain challenges along with material and labor cost inflation, partially offset by pricing actions and mix.

The segment backlog at Sept. 30, totaled $915.1 million and was up 22.1% compared to $749.7 million at September 30, 2021.

Specialty Vehicles (SV)

SV segment sales were $103.9 million, an increase of $22.7 million, or 27.9%, from $81.2 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 $15.6 million, or 15.0% of sales, an increase of $9.3 million, or 148.9%, from $6.2 million, or 7.7% 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 Sept. 30, totaled $128.8 million and was up 25.2% compared to $102.9 million at September 30, 2021.

2022 Outlook

“Given our third quarter performance, chassis visibility for the balance of the year, and our strong backlog, we are tightening our full year guidance,” said Jon Douyard, Chief Financial Officer. “Our balance sheet and liquidity remain strong, and while free cash flow performance has been challenging year-to-date, we expect to see recovery in the fourth quarter as completion and delivery of vehicles improves.”

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

• Revenue to be in the range of $1.0 billion to $1.1 billion
• Adjusted EBITDA of $62.5 to $72.5 million, including approximately $30 million of expenses related to EV development
• Income from continuing operations of $29.7 to $37.6 million
• Earnings per share of $0.83 to $1.05
• Adjusted earnings per share of $1.02 to $1.24

Adams concluded, “Our team is working hard to maintain our positive momentum and close out the year strong, while executing our long-term growth strategy. We believe the strength of our portfolio, talented team, and operations provides a strong foundation to continue delivering meaningful shareholder value through 2022 and beyond.”

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: 10163195

For more information about Shyft, please visit www.theshyftgroup.com.

About The Shyft Group