The Shyft (SHYF) - 2025 Q1 - Quarterly Report

Financial Performance - Sales for Q1 2025 were $204.6 million, an increase of 3.4$197.9 million in Q1 2024[83] - Gross margin improved to 19.7% in Q1 2025, up from 17.2% in Q1 2024[83] - Operating income for Q1 2025 was $1.7 million, compared to an operating loss of$1.9 million in Q1 2024[83] - Net loss decreased to $1.4 million in Q1 2025 from a net loss of$4.7 million in Q1 2024[93] - Adjusted EBITDA for Q1 2025 was $12.3 million, an increase of 101.6$6.1 million in Q1 2024[94] Order Backlog - Order backlog as of March 31, 2025, was $335.3 million, a decrease of 23.7$439.4 million a year earlier[83] - The consolidated backlog as of March 31, 2025, totaled $335.3 million, a decrease of$104.1 million, or 23.7%, from $439.4 million at March 31, 2024[95] - The Fleet Vehicles and Services (FVS) backlog decreased by$110.8 million, or 31.1%, primarily due to vehicle sales and softer demand in delivery vans[96] Segment Performance - Sales in the FVS segment were $96.1 million for Q1 2025, a decrease of$11.7 million or 10.8% compared to $107.8 million in Q1 2024[107] - Adjusted EBITDA for the FVS segment increased to$3.6 million in Q1 2025 from $0.9 million in Q1 2024, an increase of$2.7 million[108] - Sales in the Specialty Vehicles (SV) segment were $82.2 million in Q1 2025, down$7.9 million or 8.8% from $90.1 million in Q1 2024[109] - Adjusted EBITDA for the SV segment decreased to$14.3 million in Q1 2025 from $17.0 million in Q1 2024, a decrease of$2.7 million[110] Cash Flow and Debt - Cash and cash equivalents increased by $0.4 million to$16.2 million as of March 31, 2025[111] - Cash used in operating activities was $4.5 million in Q1 2025, an increase of$0.5 million from $4.0 million in Q1 2024[112] - The company generated$9.9 million of cash through financing activities in Q1 2025, a decrease of $3.0 million from$12.9 million in Q1 2024[114] - As of March 31, 2025, the company had $110.0 million in outstanding debt under its revolving credit facility[124] - The revolving credit facility allows borrowing up to$300.0 million, with available borrowings totaling $76.9 million as of March 31, 2025[118] Market Risks and Commodity Exposure - A hypothetical increase of 100 basis points in interest rates would lead to an additional$1.1 million in annual interest expense[124] - The company does not utilize derivative instruments to manage exposure to fluctuations in steel and aluminum prices[125] - The company engages in pre-buys of components affected by commodity price changes to mitigate exposure to price increases[125] - There has been no material change in the nature or categories of primary market risk exposures as of the report date[126] - The company does not anticipate any significant changes in its primary market risk exposure in the near term, defined as one year from the most recent balance sheet[126] - Prevailing interest rates and commodity costs are influenced by market factors beyond the company's control[127] Strategic Initiatives - The acquisition of Independent Truck Upfitters was completed for $49.9 million, with an additional earn-out of up to$8.0 million[83] - The company introduced the Blue Arc™ Electric Vehicle Solutions, with the Class 4 all-electric truck now in production[83] - The Rapid Driver Cooling System was deployed in 5,860 walk-in vans, enhancing driver comfort and vehicle efficiency[83] - The merger with Aebi Schmidt is expected to close in mid-2025, with Shyft shareholders owning approximately 48% of the combined company[79]