The Shyft Group Reports First Quarter 2025 Results

Sales increased 3.4% year-over-year with notable improvement in profitability Strong balance sheet is well-positioned with net leverage ratio less than 2.0x Maintained full-year 2025 outlook Merger integration planning underway with Aebi Schmidt; transaction remains on track to close by mid-2025 , /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 ended March 31, 2025. First Quarter 2025 Financial Highlights For the first quarter of 2025 compared to the first quarter of 2024: Sales of $204.6 million, an increase of $6.7 million, or 3.4%, from $197.9 million Net loss of $1.4 million, or ($0.04) per share, compared to a loss of $4.7 million, or ($0.14) per share Adjusted EBITDA of $12.3 million, or 6.0% of sales, an increase of $6.2 million, from $6.1 million, or 3.1% of sales Adjusted net income of $2.4 million, or $0.07 per share, compared to a loss of $1.4 million, or ($0.04) per share Consolidated backlog1 of $335.3 million as of March 31, 2025, down $104.1 million, or 23.7%, compared to $439.4 million as of March 31, 2024; Improvement of $22.1 million or 7.1% versus year-end Blue Arc sales of $26.3 million in the quarter "We are pleased with our start to the year and the team's ability to deliver better than expected financial results," said John Dunn, President and CEO. "The team is focused on driving operational efficiency and commercial growth initiatives, positioning us well to continue to capture market share." 2025 Financial Outlook"Disciplined execution drove meaningful year-over-year margin improvement," said Scott Ocholik, Interim Chief Financial Officer. "As we continue to focus on improved cash generation, we expect to maintain a strong balance sheet." Full-year 2025 outlook, notwithstanding further changes in the operating environment, is as follows: Sales of $870 to $970 million Adjusted EBITDA of $62 to $72 million Adjusted earnings per share of $0.69 to $0.92 Free cash flow of $25 to $30 million Dunn concluded, "Looking ahead, we are excited about our pending merger with Aebi Schmidt as it creates a premier global specialty vehicles leader with increased scale, broader product and service offerings, and strong industry expertise, all of which will allow us to better serve our customers. There are clear opportunities for the combined company to grow and deliver additional value to our shareholders." Footnote: 1.) Consolidated backlog does not reflect Blue Arc order activity 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) 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, Builtmore Contract Manufacturing™, and Independent Truck Upfitters. 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 2,900 employees and contractors across campuses, and operates facilities in Arizona, California, Florida, Indiana, Iowa, Maine, Michigan, Missouri, Pennsylvania, Tennessee, Texas, and Saltillo, Mexico. The Company reported sales of $786 million in 2024. Learn more at TheShyftGroup.com.  Forward Looking StatementsCertain statements in this press release are forward-looking statements. In some cases, Shyft has identified forward-looking statements by such words or phrases as "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements", including the negative of those words and phrases. Such forward-looking statements are based on management's current views and assumptions regarding future events, future business conditions and the outlook for Shyft based on currently available information. These forward-looking statements may include projections of Shyft's future financial performance, Shyft's anticipated growth strategies and anticipated trends in Shyft's business. These statements are only predictions based on management's current expectations and projections about future events. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement and may include statements regarding the expected timing and structure of the proposed transaction; the ability of the parties to complete the proposed transaction considering the various closing conditions; the expected benefits of the proposed transaction, such as improved operations, enhanced revenues and cash flow, synergies, growth potential, market profile, business plans, expanded portfolio and financial strength; the competitive ability and position of the combined company following completion of the proposed transaction; and anticipated growth strategies and anticipated trends in Shyft's, Aebi Schmidt's and, following the completion of the proposed transaction, the combined company's business. Additional factors that could cause actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements include, among others, the non-satisfaction or non-waiver, on a timely basis or otherwise, of one or more closing conditions to the proposed transaction; the prohibition or delay of the consummation of the proposed transaction by a governmental entity; the risk that the proposed transaction may not be completed in the expected time frame; unexpected costs, charges or expenses resulting from the proposed transaction; uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction or integration; the ability of the combined company to implement its business strategy; difficulties and delays in achieving revenue and cost synergies of the combined company; inability to retain and hire key personnel; negative changes in the relationships with major customers and suppliers that adversely affect revenues and profits; disruptions to existing business operations; the occurrence of any event that could give rise to termination of the proposed transaction; potential litigation in connection with the proposed transaction or other settlements or investigations that may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability; risks related to ownership of Aebi Schmidt common stock; uncertainty as to the long-term value of the combined company's common stock; and the diversion of Shyft's and Aebi Schmidt's management's time on transaction-related matters. These risks, as well as other risks associated with the businesses of Shyft and Aebi Schmidt, are more fully discussed in the combined proxy statement/prospectus. Although management believes the expectations reflected in the forward-looking statements are reasonable, Shyft cannot guarantee future results, level of activity, performance or achievements. Moreover, neither management, Shyft nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Shyft wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Shyft is under no duty to and specifically declines to undertake any obligation to publicly revise or update any of these forward-looking statements after the date of this press release to conform its prior statements to actual results, revised expectations or to reflect the occurrence of anticipated or unanticipated events. Additional information concerning these and other factors that may impact Shyft's and Aebi Schmidt's expectations and projections can be found in Shyft's periodic filings with the Securities and Exchange Commission ("SEC"), including Shyft's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Shyft's SEC filings are available publicly on the SEC's website at www.sec.gov. No offer or solicitationThis communication is for informational purposes only and is not intended to and shall not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements. Participants in the SolicitationShyft, Aebi Schmidt and certain of their respective directors and executive officers and other members of their respective management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies in connection with the proposed transaction, including a description of their direct or indirect interests in the transaction, by security holdings or otherwise, are set forth in the combined proxy statement/prospectus and other relevant materials filed with the SEC. Information regarding the directors and executive officers of Shyft is contained in the sections entitled "Election of Directors" and "Ownership of Securities" included in Shyft's proxy statement for the 2025 annual meeting of stockholders, which was filed with the SEC on March 31, 2025 (and which is available at sec.gov/Archives/edgar/data/743238/000114036125011166/ny20039255x1_def14a.htm) and in the section entitled "Directors, Executive Officers, and Corporate Governance" included in Shyft's Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 20, 2025 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000743238/000143774925004501/shyf20241231c_10k.htm), and certain of its Current Reports filed on Form 8-K. These documents can be obtained free of charge from the sources indicated below. Additional information and where to find itAebi Schmidt has filed a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The Form S-4 contains a combined proxy statement/prospectus of Shyft and Aebi Schmidt. Aebi Schmidt and Shyft prepared and filed the combined proxy statement/prospectus with the SEC and Shyft will mail the combined proxy statement/prospectus to its stockholders and file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for any registration statement, proxy statement/prospectus or other documents that may be filed with the SEC in connection with the proposed transaction. INVESTORS SHOULD READ THE COMBINED PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THE COMBINED PROXY STATEMENT/PROSPECTUS AND SUCH DOCUMENTS, BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. The Form S-4, the combined proxy statement/prospectus and all other documents filed with the SEC in connection with the transaction will be available when filed free of charge on the SEC's web site at www.sec.gov. Copies of documents filed with the SEC by Shyft will be made available free of charge on Shyft's investor relations website at https://theshyftgroup.com/investor-relations/. CONTACTSMEDIASydney MacheskyDirector, Corporate Communications[email protected]586.413.4112 INVESTORSRandy Wilson Vice President, Investor Relations and Treasury [email protected]248.727.3755 The Shyft Group, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) (Unaudited) March 31, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 16,171 $ 15,780 Accounts receivable, less allowance of $436 and $533 102,148 86,677 Contract assets 43,763 40,896 Inventories 103,777 109,859 Other receivables - chassis pool agreements 40,474 37,032 Other current assets 7,110 7,346 Total current assets 313,443 297,590 Property, plant and equipment, net 81,114 81,067 Right of use assets – operating leases 39,208 41,101 Goodwill 64,142 64,094 Intangible assets, net 57,505 59,064 Net deferred tax asset 23,545 23,545 Other assets 2,126 2,287 TOTAL ASSETS $ 581,083 $ 568,748 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 88,287 $ 95,128 Accrued warranty 7,888 7,653 Accrued compensation and related taxes 11,396 16,198 Contract liabilities 10,171 3,553 Operating lease liability 9,463 9,677 Other current liabilities and accrued expenses 14,273 12,798 Short-term debt - chassis pool agreements 40,474 37,032 Current portion of long-term debt 258 235 Total current liabilities 182,210 182,274 Other non-current liabilities 9,674 9,772 Long-term operating lease liability 31,546 33,156 Long-term debt, less current portion 110,327 95,223 Total liabilities 333,757 320,425 Commitments and contingent liabilitiesShareholders' equity: Preferred stock, no par value: 2,000 shares authorized (none issued) - - Common stock, no par value : 80,000 shares authorized; 35,004 and 34,917 outstanding 101,944 99,752 Retained earnings 145,382 148,571 Total shareholders' equity 247,326 248,323 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 581,083 $ 568,748 The Shyft Group, Inc. and SubsidiariesConsolidated Statements of Operations(In thousands, except per share data)(Unaudited) Three Months Ended March 31, 2025 2024 Sales $ 204,599 $ 197,889 Cost of products sold 164,297 163,827 Gross profit 40,302 34,062 Operating expenses: Research and development 3,887 3,719 Selling, general and administrative 34,666 32,273 Total operating expenses 38,553 35,992 Operating income (loss) 1,749 (1,930) Other income (expense) Interest expense (2,661) (2,053) Other income 130 97 Total other income (expense) (2,531) (1,956) Loss before income taxes (782) (3,886) Income tax expense 654 783 Net loss $ (1,436) $ (4,669) Basic loss per share $ (0.04) $ (0.14) Diluted loss per share $ (0.04) $ (0.14) Basic weighted average common shares outstanding 34,933 34,319 Diluted weighted average common shares outstanding 34,933 34,319 The Shyft Group, Inc. and SubsidiariesConsolidated Statements of Cash Flows(In thousands)(Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ (1,436) $ (4,669) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 5,502 4,435 Non-cash stock based compensation expense 2,313 1,474 (Gain) loss on disposal of assets (4) 66 Changes in accounts receivable and contract assets (18,338) (1,746) Changes in inventories 6,082 7,204 Changes in accounts payable (5,966) (10,119) Changes in accrued compensation and related taxes (1,544) (1,851) Changes in accrued warranty 235 981 Changes in other assets and liabilities 8,637 268 Net cash used in operating activities (4,519) (3,957) Cash flows from investing activities: Purchases of property, plant and equipment (4,984) (5,719) Proceeds from sale of property, plant and equipment 20 75 Net cash used in investing activities (4,964) (5,644) Cash flows from financing activities: Proceeds from long-term debt 35,000 40,000 Payments on long-term debt (20,000) (25,000) Payments of dividends (1,747) (1,716) Exercise and vesting of stock incentive awards (3,379) (389) Net cash provided by financing activities 9,874 12,895 Net increase in cash and cash equivalents 391 3,294 Cash and cash equivalents at beginning of period 15,780 9,957 Cash and cash equivalents at end of period $ 16,171 $ 13,251 The Shyft Group, Inc. and SubsidiariesSales and Other Financial Information by Business Segment(Unaudited) Quarter Ended March 31, 2025 (in thousands of dollars) Business Segments Fleet Vehicles Specialty Elimination & & Services Vehicles Other Consolidated Fleet vehicle sales $ 78,260 $ - $ - $ 78,260 Motorhome chassis sales - 14,028 - 14,028 Other specialty vehicles sales - 60,633 26,297 86,930 Aftermarket parts and accessories sales 17,856 7,525 - 25,381 Total Sales $ 96,116 $ 82,186 $ 26,297 $ 204,599 Adjusted EBITDA $ 3,628 $ 14,254 $ (5,601) $ 12,281 The Shyft Group, Inc. and SubsidiariesSales and Other Financial Information by Business Segment(Unaudited) Quarter Ended March 31, 2024 (in thousands of dollars) Business Segments Fleet Vehicles Specialty Elimination & & Services Vehicles Other Consolidated Fleet vehicle sales $ 95,478 $ - $ - $ 95,478 Motorhome chassis sales - 30,771 - 30,771 Other specialty vehicles sales - 53,405 - 53,405 Aftermarket parts and accessories sales 12,281 5,954 - 18,235 Total Sales $ 107,759 $ 90,130 $ - $ 197,889 Adjusted EBITDA $ 935 $ 16,973 $ (11,820) $ 6,088 The Shyft Group, Inc. and SubsidiariesSales and Other Financial Information by Business Segment(Unaudited) Period End Backlog (amounts in thousands of dollars) Mar. 31, 2025 Dec. 31, 2024 Sept. 30, 2024 Jun. 30, 2024 Mar. 31, 2024 Fleet Vehicles and Services $ 245,337 $ 244,784 $ 267,952 $ 294,586 $ 356,089 Specialty Vehicles 89,997 68,460 77,456 59,856 83,334 Total Backlog $ 335,334 $ 313,244 $ 345,408 $ 354,442 $ 439,423 Reconciliation of Non-GAAP Financial MeasuresThis release presents Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted net income, adjusted earnings per share, and free cash flow, each of which is a non-GAAP financial measure. We define Adjusted EBITDA as income before interest, income taxes, depreciation and amortization, as adjusted to eliminate the impact of restructuring charges, transaction related expenses and adjustments, non-cash stock-based compensation expenses, and other gains and losses not reflective of our ongoing operations. We present the non-GAAP measure Adjusted EBITDA because we consider it to be an important supplemental measure of our performance. The presentation of Adjusted EBITDA enables investors to better understand our operations by removing items that we believe are not representative of our continuing operations and may distort our longer-term operating trends. We believe this measure to be useful to improve the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not indicative of our continuing operating performance. We believe that presenting this non-GAAP measure is useful to investors because it permits investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate our historical performance. Our management uses Adjusted EBITDA to evaluate the performance of and allocate resources to our segments. Adjusted EBITDA is also used, along with other financial and non-financial measures, for purposes of determining annual incentive compensation for our management team and long-term incentive compensation for certain members of our management team. We define free cash flow as net cash provided by (used in) operating activities less purchases of property, plant and equipment and add proceeds from sale of property, plant and equipment. We believe this measure of free cash flow provides management and investors further useful information on cash generation or use in our operations. The Company does not provide reconciliations of forward-looking non-GAAP financial measures, such as adjusted EPS, adjusted EBITDA, and free cash flow, to the most comparable GAAP financial measures on a forward-looking basis because the Company is unable to provide a meaningful or accurate calculation or estimation of reconciling items, and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, transaction and compensation costs related to the proposed transaction with Aebi Schmidt, and other non-routine costs. Each of such adjustments has not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. We believe that the presentation of these non-GAAP measures, when considered together with the corresponding GAAP financial measures and the reconciliations to that measure, provides investors with additional understanding of the factors and trends affecting our business than could be obtained in the absence of this disclosure. The Shyft Group, Inc. and SubsidiariesConsolidated Financial Summary (Non-GAAP)(In thousands, except per share data)(Unaudited) Three Months Ended March 31, The Shyft Group, Inc. 2025 % of sales 2024 % of sales Net loss $ (1,436) (0.7 %) $ (4,669) (2.4 %) Add (subtract): Restructuring and other related charges 356 52 Transaction related expenses and adjustments 2,231 - Non-cash stock-based compensation expense 2,313 1,474 Legacy legal matters - 1,850 CEO transition - 110 Tax effect of adjustments (1,033) (258) Adjusted net income (loss) $ 2,431 1.2 % $ (1,441) (0.7 %) Net loss $ (1,436) (0.2 %) $ (4,669) (2.4 %) Add (subtract): Depreciation and amortization 5,502 4,435 Income tax expense 654 783 Interest expense 2,661 2,053 EBITDA $ 7,381 3.6 % $ 2,602 1.3 % Add: Restructuring and other related charges 356 52 Transaction related expenses and adjustments 2,231 - Non-cash stock-based compensation expense 2,313 1,474 Legacy legal matters - 1,850 CEO transition - 110 Adjusted EBITDA $ 12,281 6.0 % $ 6,088 3.1 % Diluted net loss per share $ (0.04) $ (0.14) Add (subtract): Restructuring and other related charges 0.01 - Transaction related expenses and adjustments 0.06 - Non-cash stock-based compensation expense 0.07 0.05 Legacy legal matters - 0.05 CEO transition - - Tax effect of adjustments (0.03) - Adjusted diluted net earnings (loss) per share $ 0.07 $ (0.04) The Shyft Group, Inc. and SubsidiariesConsolidated Financial Summary (Non-GAAP)(In thousands)(Unaudited) Three Months Ended March 31, The Shyft Group, Inc. 2025 2024 Net cash used in operating activities $ (4,519) $ (3,957) Purchases of property, plant and equipment (4,984) (5,719) Proceeds from sale of property, plant and equipment 20 75 Free cash flow $ (9,483) $ (9,601) SOURCE The Shyft Group, Inc. 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The Shyft Group Reports First Quarter 2025 Results

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