The Shyft (US:SHYF)2023-10-26 11:34Financial Performance - Sales for Q3 2023 were $201.3 million, a decrease of 29.6% from $286.1 million in Q3 2022[64] - Gross margin for Q3 2023 was 18.3%, down from 18.9% in Q3 2022[64] - Operating income for Q3 2023 was $4.1 million, compared to $22.0 million in Q3 2022[64] - Net income for Q3 2023 decreased to $4.5 million from $17.3 million in Q3 2022[74] - Adjusted EBITDA for Q3 2023 was $11.0 million, down from $27.1 million in Q3 2022, a decrease of $16.1 million[75] - Net income for the first nine months of 2023 decreased by $7.8 million to $10.9 million compared to $18.7 million for the same period in 2022, with diluted earnings per share dropping from $0.53 to $0.31[83] - Consolidated Adjusted EBITDA for the first nine months of 2023 was $37.6 million, down from $40.1 million in the same period of 2022, a decrease of $2.5 million[84] Order Backlog - Order backlog as of September 30, 2023, was $464.4 million, a decrease of 55.5% from $1,043.9 million a year earlier[64] - The consolidated order backlog as of September 30, 2023, totaled $464.4 million, a decrease of $579.5 million or 55.5% compared to $1,043.9 million at the same date in 2022[85] - The Fleet Vehicles and Services (FVS) backlog decreased by $531.7 million, or 58.1%, primarily due to vehicle sales and softening demand in delivery vans[86] Segment Performance - Sales in the FVS segment for the first nine months of 2023 were $422.7 million, a decrease of $11.4 million or 2.6% from $434.1 million in the same period of 2022[97] - Adjusted EBITDA in the FVS segment for the first nine months of 2023 was $32.9 million, down from $38.0 million in the same period of 2022, a decrease of $5.1 million[98] - Sales in the Specialty Vehicles (SV) segment for the first nine months of 2023 were $251.4 million, a decrease of $42.0 million or 14.3% from $293.4 million in the same period of 2022[101] - Adjusted EBITDA for the SV segment for the first nine months of 2023 increased by $8.7 million or 22.6% to $47.2 million compared to $38.5 million in the same period of 2022[102] Cash and Debt Management - Cash and cash equivalents decreased by $1.7 million from December 31, 2022, to a balance of $9.9 million as of September 30, 2023[103] - Cash generated from operating activities during the nine months ended September 30, 2023, was $44.8 million, an increase of $89.3 million from cash used in the same period of 2022[104] - The Company has a secured revolving credit facility of up to $400.0 million, maturing on November 30, 2026, with available borrowings of $177.6 million as of September 30, 2023[109] - The interest rate on the revolving credit facility was 6.43% (one-month SOFR plus 1.00%) as of September 30, 2023[109] - As of September 30, 2023, the Company had $55.0 million in outstanding debt under its revolving credit facility, with a potential increase of $0.6 million in annual interest expense for a 100 basis point rise in interest rates[117] - The Company amended its Credit Agreement on May 31, 2023, transitioning the interest rate from LIBOR to SOFR, with no expected material increase in interest expense[118] Compliance and Risk Management - The Company maintains compliance with all financial covenants in its Credit Agreement as of September 30, 2023[111] - The Company is exposed to commodity price fluctuations, particularly in steel and aluminum, and engages in pre-buys to mitigate risks associated with these price changes[119] - There have been no changes in internal control over financial reporting that materially affected the Company during the quarter ended September 30, 2023[124] - The Company believes it has sufficient financial resources to accommodate potential increases in interest rates and does not engage in market-risk-sensitive instruments for trading purposes[117] Corporate Actions - The company announced an agreement with Rush Enterprises to sell and service Blue Arc Class 3, 4, and 5 all-electric delivery vehicles in October 2023[64] - The Blue Arc EV Solutions received certification from the EPA and compliance from CARB for Class 3, 4, and 5 electric delivery vehicles in 2023[64] - The Company repurchased 673,744 shares for $10.3 million in the third quarter of 2023, and a total of 348,705 shares for $8.8 million in the first quarter of 2023[112] - The Company declared dividends of $0.05 per share on three occasions in 2023, with the most recent declaration on August 2, 2023[114]