First quarter sales of $198 million; Quarter end consolidated backlog of $439 million with FVS backlog up 10% sequentially Maintains 2024 outlook with sales of $850 to $900 million and adjusted EBITDA of $40 to $50 million NOVI, Mich., April 25, 2024 /PRNewswire/ -- 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 first quarter ending March 31, 2024. First Quarter 2024 Financial Highlights For the first quarter of 2024 compared to the first quarter of 2023:  Sales of $197.9 million, a decrease of $45.5 million, or 18.7%, from $243.4 million Net loss of $4.7 million, or ($0.14) per share, compared to net income of $1.7 million, or $0.05 per share Adjusted EBITDA of $6.1 million, or 3.1% of sales, a decrease of $4.7 million, from $10.8 million, or 4.4% of sales; Results include $5.5 million of EV program related costs versus $8.5 million in the prior year Adjusted net loss of $1.4 million, or ($0.04) per share, compared to adjusted net income of $4.3 million, or $0.12 per share in the first quarter of 2023 Consolidated backlog of $439.4 million as of March 31, 2024, down $228.0 million, or 34.2%, compared to $667.4 million as of March 31, 2023; On a sequential quarter basis, consolidated backlog was up 7.4% "We made progress implementing our operating framework, which includes high performing teams, operational excellence, and customer centricity," said John Dunn, President and CEO. "Our sales team drove improved commercial activity in the quarter, which enabled a sequential improvement in order backlog. Our SV business continues to execute well and delivered solid results in the quarter." First Quarter 2024 Business Segment Financial HighlightsFor the first quarter of 2024 compared to the first quarter of 2023:  Fleet Vehicles and Services (FVS) Sales were $107.8 million for the first quarter of 2024, down 32.4%, or $51.6 million year over year Adjusted EBITDA for the first quarter of 2024 was $0.9 million, or 0.9% of sales, a decrease of $11.6 million, from $12.5 million, or 7.8% of sales, a year ago Segment backlog was $356.1 million as of March 31, 2024, down 39.1% compared to $584.9 million as of March 31, 2023 Specialty Vehicles (SV) Sales were $90.1 million for the first quarter of 2024, up 3.4%, or $2.9 million year over year Adjusted EBITDA for the first quarter of 2024 was $17.0 million, or 18.8% of sales, an increase of $3.1 million, from $13.9 million, or 15.9% of sales, a year ago Segment backlog was $83.3 million as of March 31, 2024, up 1.0% compared to $82.5 million as of March 31, 2023 2024 Financial Outlook"We are pleased with our start to the year considering the challenging end-markets," said Jon Douyard, Chief Financial Officer. "While there was improvement in FVS order activity to start the year, the parcel market remains soft, and we remain cautious on near-term demand. Overall, our team is focused on driving operational efficiency and commercial growth initiatives, positioning us to affirm our prior outlook." Guidance for full-year 2024, notwithstanding further changes in the operating environment, is as follows: Sales to be in the range of $850 million to $900 million; Assumes no Blue Arc EV revenue Adjusted EBITDA of $40 to $50 million, including EV spending of $20 to $25 million Net income of $2.5 to $10.5 million, with an income tax rate of approximately 20% Earnings per share of $0.07 to $0.30 Adjusted earnings per share of $0.28 to $0.51 Capital expenditures of approximately $20 to $25 million Free cash flow of $25 to $35 million Dunn concluded, "Shyft has industry leading products and a highly engaged team, who are identifying opportunities to drive companywide synergies. Recently launched initiatives to enhance sales and procurement are beginning to deliver positive results. The Blue Arc team is making progress as production is targeted for late 2024. We remain confident in our team's ability to manage through current market conditions and deliver for shareholders over the long term." Conference Call and Webcast InformationThe Shyft Group will host a conference call at 8:30 a.m. ET today to discuss these results and current business trends. The conference call and webcast will be available via:Webcast: https://theshyftgroup.com/investor-relations/webcasts/Conference Call: 1-844-868-8845 (domestic) or 412-317-6591 (international); passcode: 10185321 About The Shyft GroupThe 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 and Services™ and Shyft Specialty Vehicles™. Today, its family of brands include Utilimaster®, Blue Arc™ EV Solutions, 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 3,000 employees and contractors across campuses, and operates facilities in Arizona, California, Florida, Indiana, Maine, Michigan, Missouri, Pennsylvania, Tennessee, Texas, and Saltillo, Mexico. The Company reported sales of $872 million in 2023. Learn more at TheShyftGroup.com.  This release contains information, including our sales and earnings guidance, all other information provided with respect to our outlook for 2024 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, 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, 2023, 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. CONTACTS: MEDIA Sydney Lepora Director, Corporate Communications INVESTORS: Randy Wilson Vice President Investor Relations and Treasury   The Shyft Group, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) (Unaudited) March 31, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $          13,251 $             9,957 Accounts receivable, less allowance of $277 and $276 78,820 79,573 Contract assets 52,803 50,305 Inventories 97,931 105,135 Other receivables - chassis pool agreements 18,890 34,496 Other current assets 6,700 7,462 Total current assets 268,395 286,928 Property, plant and equipment, net 80,905 83,437 Right of use assets – operating leases 45,078 45,827 Goodwill 48,880 48,880 Intangible assets, net 44,399 45,268 Net deferred tax asset 17,300 17,300 Other assets 2,724 2,409 TOTAL ASSETS $        507,681 $       530,049 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $          86,159 $         99,855 Accrued warranty 8,212 7,231 Accrued compensation and related taxes 11,675 13,526 Contract liabilities 3,939 4,756 Operating lease liability 10,050 10,817 Other current liabilities and accrued expenses 12,605 11,965 Short-term debt - chassis pool agreements 18,890 34,496 Current portion of long-term debt 164 185 Total current liabilities 151,694 182,831 Other non-current liabilities 7,265 8,184 Long-term operating lease liability 36,776 36,724 Long-term debt, less current portion 65,121 50,144 Total liabilities 260,856 277,883 Shareholders' equity: Preferred stock, no par value: 2,000 shares authorized (none issued) - - Common stock, no par value : 80,000 shares authorized; 34,361 and 34,303 outstanding 94,790 93,705 Retained earnings 152,035 158,461 Total shareholders' equity 246,825 252,166 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $         507,681 $        530,049   The Shyft Group, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2024 2023 Sales $ 197,889 $ 243,439 Cost of products sold 163,827 200,515 Gross profit 34,062 42,924 Operating expenses:     Research and development 3,719 6,949     Selling, general and administrative 32,273 32,289     Total operating expenses 35,992 39,238 Operating income (loss) (1,930) 3,686 Other income (expense)