The Shyft (SHYF) - 2024 Q3 - Quarterly Report

Financial Performance - Sales for Q3 2024 were $194.1 million, a decrease of 3.6$201.3 million in Q3 2023[59] - Gross margin improved to 20.4% in Q3 2024, compared to 18.3% in Q3 2023[59] - Operating income for Q3 2024 was $5.3 million, up from$4.1 million in Q3 2023[59] - Net income decreased to $3.1 million in Q3 2024 from$4.5 million in Q3 2023, with diluted earnings per share at $0.09 compared to$0.13[59][71] - Consolidated sales for the first nine months of 2024 were $584.7 million, a decrease of 12.7$669.9 million in the same period of 2023[72] - Net income for the first nine months of 2024 was $0.6 million, a decrease of$10.3 million from $10.9 million in the same period of 2023[78] - Adjusted EBITDA for Q3 2024 increased to$14.3 million, up from $11.0 million in Q3 2023[72] - Adjusted EBITDA for the first nine months of 2024 was$32.9 million, down $4.7 million from$37.6 million in the first nine months of 2023[79] Order Backlog and Sales Segments - Order backlog was $345.4 million as of September 30, 2024, a decrease of 25.6$464.4 million a year earlier[59] - Consolidated order backlog as of September 30, 2024, totaled $345.4 million, a decrease of$119.0 million or 25.6% compared to $464.4 million at the same date in 2023[80] - Fleet Vehicles and Services segment sales for the first nine months of 2024 were$323.5 million, a decrease of $99.2 million or 23.5$422.7 million in the first nine months of 2023[91] - Specialty Vehicles segment sales for the first nine months of 2024 were $260.4 million, an increase of$9.0 million or 3.6% from $251.4 million in the first nine months of 2023[95] Cash Flow and Investments - Cash and cash equivalents increased by$11.5 million to $21.4 million as of September 30, 2024[98] - Cash generated from operating activities during the first nine months of 2024 was$17.2 million, a decrease of $27.6 million from$44.8 million in the same period of 2023[98] - Cash used in investing activities increased by $43.5 million to$60.0 million for the nine months ended September 30, 2024, primarily due to a $48.1 million increase related to the acquisition of ITU[99] - Cash generated from financing activities increased by$84.2 million to $54.3 million for the nine months ended September 30, 2024, driven by$35.0 million in increased proceeds from long-term debt[100] Debt and Credit Facilities - The company has $110.0 million outstanding debt under its revolving credit facility as of September 30, 2024, with a potential increase in interest expense of$1.1 million for a 100 basis point rise in interest rates[111] - The revolving credit facility was reduced from $400.0 million to$300.0 million, with a maturity date of November 30, 2026[102] - Available borrowings under the Credit Agreement were $34.1 million as of September 30, 2024, down from$83.2 million at December 31, 2023[105] - The company reported compliance with all financial covenants in its Credit Agreement as of September 30, 2024[105] Acquisitions and Operations - The company acquired Independent Truck Upfitters for $50.9 million, enhancing service body product offerings and upfit capabilities[59] - The company is currently integrating operations following the acquisition of Independent Truck Upfitters (ITU) on July 24, 2024[116] Research and Development - Research and development expenses for Q3 2024 were$4.2 million, down from $5.2 million in Q3 2023, reflecting a shift towards production readiness for electric vehicle initiatives[68] Tax and Compliance - The effective tax rate for the first nine months of 2024 was 50.3$19.1 million, down $13.8 million from$32.9 million in the first nine months of 2023[92] - Adjusted EBITDA for the Specialty Vehicles segment for the first nine months of 2024 was $50.7 million, an increase of$3.5 million from $47.2 million in the first nine months of 2023[96] - The company has outstanding letters of credit totaling$1.9 million related to workers' compensation insurance as of September 30, 2024[104] - The company does not enter into derivative instruments to manage exposure to fluctuations in steel and aluminum prices, relying instead on pre-buys and active supply sourcing[112] - The company declared dividends of $0.05 per share on multiple occasions in 2024 and 2023, maintaining a consistent dividend policy[108]