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, on Thursday reported operating results for the third quarter, ending September 30, 2021.
Third Quarter 2021 Highlights from Continuing Operations
For the third quarter of 2021 compared to the third quarter of 2020:
- Sales of $272.6 million, an increase of $69.1 million, or 34.0%, from $203.5 million, reflecting increased sales in all product categories.
- Gross profit margin of 20.6% of sales compared to 24.9% 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, or 12.4% of sales, an increase of $1.1 million, or 3.5%, from $32.6 million, or 16.0% of sales.
- Adjusted net income of $22.9 million, or $0.63 per share, an increase of $0.8 million, or 3.2%, 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, or 19.5% from $32.7 million.
- Consolidated backlog at September 30, 2021, was a record $852.6 million, up $572.0 million, or 203.8%, 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.
“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 $198.5 million, an increase of 36.7% from $145.2 million, reflecting strong sales across all product categories.
Adjusted EBITDA increased $3.6 million to $36.8 million, or 18.5% of sales, from $33.2 million, or 22.9% of sales, a year ago. The increase was primarily due to higher volume, while year-over-year margins were impacted by product mix and higher material and labor costs.
The segment backlog at September 30, 2021, totaled a record $758.5 million, up 231.4%, compared to $228.9 million at September 30, 2020. On a sequential basis, backlog increased $97.6 million, or 14.8% from $660.9 million in the second quarter of 2021. This increase reflects strong demand for delivery vehicles, including the recently announced USPS order.
Specialty Vehicles (SV)
SV segment sales were $74.1 million, an increase of 27.1% from $58.3 million, led by strong growth in luxury motor coach chassis sales and service bodies.
Adjusted EBITDA was $5.8 million, or 7.9% of sales, compared to $7.2 million, or 12.3% of sales, a year ago. The decrease was due to higher material and labor costs.
The segment backlog at September 30, 2021, totaled $94.0 million, up 81.7% compared to $51.8 million at September 30, 2020. On a sequential basis, backlog increased $3.5 million, or 3.9% from $90.5 million in the second quarter of 2021.
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 $676 million in 2020. Learn more about The Shyft Group at www.TheShyftGroup.com.