The Shyft (US:SHYF)2022-07-28 11:46Financial Performance - Sales for Q2 2022 were $232.2 million, a decrease of 4.8% from $244.0 million in Q2 2021[69] - Gross margin for Q2 2022 was 18.1%, down from 21.3% in Q2 2021[69] - Operating income for Q2 2022 was $7.7 million, compared to $22.2 million in Q2 2021[69] - Total sales for the first half of 2022 were $439.1 million, a slight decrease of 0.6% from $441.9 million in the first half of 2021[84] - Income from continuing operations for Q2 2022 was $5.3 million, down from $17.0 million in Q2 2021[79] - Income from continuing operations for the six months ended June 30, 2022, decreased by $27.1 million to $1.4 million compared to $28.5 million for the same period in 2021, representing a decline of 95.1%[90] - Adjusted EBITDA for Q2 2022 was $13.7 million, a decrease of 52.1% from $28.6 million in Q2 2021[81] - Consolidated Adjusted EBITDA for the six months ended June 30, 2022, was $13.0 million, a decrease of $34.7 million or 72.7% from $47.7 million for the same period in 2021[92] Order Backlog and Demand - Order backlog increased to $1,135.2 million as of June 30, 2022, up 51.1% from $751.4 million a year earlier[69] - The order backlog as of June 30, 2022, totaled $1,135.2 million, up 51.1% from $751.4 million at June 30, 2021, indicating strong demand across the product portfolio[93] - Fleet Vehicles and Services backlog increased by $347.4 million, or 53.2%, reflecting strong demand for various vehicle products[94] Segment Performance - Sales in the Fleet Vehicles and Services segment for the six months ended June 30, 2022, were $249.6 million, a decrease of $35.8 million or 12.6% from $285.4 million in the same period of 2021[105] - Adjusted EBITDA in the Fleet Vehicles and Services segment for the six months ended June 30, 2022, was $13.7 million, a decrease of $32.3 million or 70.3% from $46.0 million in the same period of 2021[106] - Sales in the Specialty Vehicles segment for the six months ended June 30, 2022, were $189.5 million, an increase of $33.1 million or 21.1% from $156.4 million in the same period of 2021[109] - Adjusted EBITDA for the Specialty Vehicles segment for the six months ended June 30, 2022, was $23.0 million, an increase of $6.8 million or 42.0% from $16.2 million in the same period of 2021[110] Cash Flow and Liquidity - Cash and cash equivalents decreased by $30.6 million from December 31, 2021, to a balance of $6.6 million as of June 30, 2022[111] - Cash used in operating activities during the six months ended June 30, 2022, was $36.7 million, a decrease of $39.9 million from positive cash flow of $3.2 million in the same period of 2021[112] - Cash used in investing activities decreased by $2.1 million to $9.9 million for the six months ended June 30, 2022, primarily due to a $2.4 million decrease in property, plant, and equipment purchases[114] - Cash generated from financing activities increased by $24.1 million to $16.0 million during the six months ended June 30, 2022, mainly due to $70.0 million of increased proceeds from long-term debt[115] Debt and Financing - The company has a secured revolving credit facility of up to $400.0 million, maturing on November 30, 2026, with an applicable borrowing rate of 2.78% as of June 30, 2022[117] - Available borrowings under the Credit Agreement totaled $199.4 million as of June 30, 2022, down from $376.8 million at December 31, 2021[118] - The company repurchased 607,306 shares for $26.8 million in the first quarter of 2022, with a total authorization of up to $250.0 million for stock buybacks[119] - An increase of 100 basis points in interest rates would result in an incremental interest expense of $0.6 million on an annualized basis, based on $55.0 million of outstanding debt[124] Risk Management - The company is exposed to commodity price fluctuations, particularly in steel and aluminum, and does not generally use derivative instruments to manage these exposures[126] Internal Controls - The company has maintained compliance with all covenants in its Credit Agreement as of June 30, 2022[118] - There have been no changes in internal control over financial reporting that materially affected the company's financial reporting during the quarter ended June 30, 2022[131] - The internal control system has inherent limitations, including human error and the possibility of overriding controls, which may affect the reliability of financial reporting[132] - Effective internal controls can only provide reasonable assurance regarding the preparation and fair presentation of financial statements[132] Research and Development - Research and development expenses for Q2 2022 were $7.6 million, significantly up from $0.9 million in Q2 2021[76] New Products - New product offerings include the Blue Arc™ EV Solutions, featuring a commercial-grade EV chassis and a fully electric Class 3 delivery van[69]