10-Q 1 shyf20220930b_10q.htm FORM 10-Q shyf20220930b_10q.htm
0000743238 SHYFT GROUP, INC. false --12-31 Q3 2022 176 187 0 0 2,000 2,000 0 0 - 0 0 80,000 80,000 35,063 35,416 0.05 0.05 0.05 0.025 0.025 0.025 190 252 1 1.0 21,482 1 9,150 (1) Excluding the nine months ended September 30, 2022. Includes expenses for month-to-month equipment leases, which are classified as short-term as the Company is not reasonably certain to renew the lease term beyond one month. 00007432382022-01-012022-09-30 xbrli:shares 00007432382022-10-21 iso4217:USD 00007432382022-09-30 00007432382021-12-31 iso4217:USDxbrli:shares 00007432382022-07-012022-09-30 00007432382021-07-012021-09-30 00007432382021-01-012021-09-30 00007432382020-12-31 00007432382021-09-30 0000743238us-gaap:CommonStockMember2021-12-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-12-31 0000743238us-gaap:RetainedEarningsMember2021-12-31 0000743238us-gaap:NoncontrollingInterestMember2021-12-31 0000743238us-gaap:CommonStockMember2022-01-012022-03-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-01-012022-03-31 0000743238us-gaap:RetainedEarningsMember2022-01-012022-03-31 0000743238us-gaap:NoncontrollingInterestMember2022-01-012022-03-31 00007432382022-01-012022-03-31 0000743238us-gaap:CommonStockMember2022-03-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-03-31 0000743238us-gaap:RetainedEarningsMember2022-03-31 0000743238us-gaap:NoncontrollingInterestMember2022-03-31 00007432382022-03-31 0000743238us-gaap:CommonStockMember2022-04-012022-06-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-04-012022-06-30 0000743238us-gaap:RetainedEarningsMember2022-04-012022-06-30 0000743238us-gaap:NoncontrollingInterestMember2022-04-012022-06-30 00007432382022-04-012022-06-30 0000743238us-gaap:CommonStockMember2022-06-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-06-30 0000743238us-gaap:RetainedEarningsMember2022-06-30 0000743238us-gaap:NoncontrollingInterestMember2022-06-30 00007432382022-06-30 0000743238us-gaap:CommonStockMember2022-07-012022-09-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-07-012022-09-30 0000743238us-gaap:RetainedEarningsMember2022-07-012022-09-30 0000743238us-gaap:NoncontrollingInterestMember2022-07-012022-09-30 0000743238us-gaap:CommonStockMember2022-09-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-09-30 0000743238us-gaap:RetainedEarningsMember2022-09-30 0000743238us-gaap:NoncontrollingInterestMember2022-09-30 0000743238us-gaap:CommonStockMember2020-12-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-12-31 0000743238us-gaap:RetainedEarningsMember2020-12-31 0000743238us-gaap:NoncontrollingInterestMember2020-12-31 0000743238us-gaap:CommonStockMember2021-01-012021-03-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-01-012021-03-31 0000743238us-gaap:RetainedEarningsMember2021-01-012021-03-31 0000743238us-gaap:NoncontrollingInterestMember2021-01-012021-03-31 00007432382021-01-012021-03-31 0000743238us-gaap:CommonStockMember2021-03-31 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-03-31 0000743238us-gaap:RetainedEarningsMember2021-03-31 0000743238us-gaap:NoncontrollingInterestMember2021-03-31 00007432382021-03-31 0000743238us-gaap:CommonStockMember2021-04-012021-06-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-04-012021-06-30 0000743238us-gaap:RetainedEarningsMember2021-04-012021-06-30 0000743238us-gaap:NoncontrollingInterestMember2021-04-012021-06-30 00007432382021-04-012021-06-30 0000743238us-gaap:CommonStockMember2021-06-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-06-30 0000743238us-gaap:RetainedEarningsMember2021-06-30 0000743238us-gaap:NoncontrollingInterestMember2021-06-30 00007432382021-06-30 0000743238us-gaap:CommonStockMember2021-07-012021-09-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-07-012021-09-30 0000743238us-gaap:RetainedEarningsMember2021-07-012021-09-30 0000743238us-gaap:NoncontrollingInterestMember2021-07-012021-09-30 0000743238us-gaap:CommonStockMember2021-09-30 0000743238us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-09-30 0000743238us-gaap:RetainedEarningsMember2021-09-30 0000743238us-gaap:NoncontrollingInterestMember2021-09-30 0000743238us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2020-02-012020-02-01 0000743238us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2020-10-012020-10-01 0000743238us-gaap:DiscontinuedOperationsHeldforsaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2022-07-012022-09-30 0000743238us-gaap:DiscontinuedOperationsHeldforsaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2021-07-012021-09-30 0000743238us-gaap:DiscontinuedOperationsHeldforsaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2022-01-012022-09-30 0000743238us-gaap:DiscontinuedOperationsHeldforsaleMembershyf:DisposalOfEmergencyResponseAndVehicleBusinessMember2021-01-012021-09-30 0000743238shyf:ChassisPoolAgreementsMember2022-09-30 0000743238shyf:ChassisPoolAgreementsMember2021-12-31 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMember2021-11-30 0000743238us-gaap:LetterOfCreditMembershyf:LendersMember2021-11-30 0000743238shyf:SwingLineLoansMembershyf:LendersMember2021-11-30 xbrli:pure 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMemberus-gaap:FederalFundsEffectiveSwapRateMember2021-11-302021-11-30 utr:M 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMember2021-11-302021-11-30 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-11-302021-11-30 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMember2022-01-012022-09-30 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-09-30 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMember2022-09-30 0000743238us-gaap:RevolvingCreditFacilityMembershyf:LendersMember2021-12-31 0000743238shyf:FleetVehiclesAndServicesMember2022-09-30 0000743238shyf:SpecialtyVehiclesMember2022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMembercountry:US2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMembercountry:US2022-07-012022-09-30 0000743238srt:ConsolidationEliminationsMembercountry:US2022-07-012022-09-30 0000743238country:US2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:NonUsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:NonUsMember2022-07-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:NonUsMember2022-07-012022-09-30 0000743238us-gaap:NonUsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMember2022-07-012022-09-30 0000743238srt:ConsolidationEliminationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredAtPointInTimeMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredAtPointInTimeMember2022-07-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredAtPointInTimeMember2022-07-012022-09-30 0000743238us-gaap:TransferredAtPointInTimeMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredOverTimeMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredOverTimeMember2022-07-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredOverTimeMember2022-07-012022-09-30 0000743238us-gaap:TransferredOverTimeMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMembercountry:US2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMembercountry:US2021-07-012021-09-30 0000743238srt:ConsolidationEliminationsMembercountry:US2021-07-012021-09-30 0000743238country:US2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:NonUsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:NonUsMember2021-07-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:NonUsMember2021-07-012021-09-30 0000743238us-gaap:NonUsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMember2021-07-012021-09-30 0000743238srt:ConsolidationEliminationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredAtPointInTimeMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredAtPointInTimeMember2021-07-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredAtPointInTimeMember2021-07-012021-09-30 0000743238us-gaap:TransferredAtPointInTimeMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredOverTimeMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredOverTimeMember2021-07-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredOverTimeMember2021-07-012021-09-30 0000743238us-gaap:TransferredOverTimeMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMembercountry:US2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMembercountry:US2022-01-012022-09-30 0000743238srt:ConsolidationEliminationsMembercountry:US2022-01-012022-09-30 0000743238country:US2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:NonUsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:NonUsMember2022-01-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:NonUsMember2022-01-012022-09-30 0000743238us-gaap:NonUsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMember2022-01-012022-09-30 0000743238srt:ConsolidationEliminationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredAtPointInTimeMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredAtPointInTimeMember2022-01-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredAtPointInTimeMember2022-01-012022-09-30 0000743238us-gaap:TransferredAtPointInTimeMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredOverTimeMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredOverTimeMember2022-01-012022-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredOverTimeMember2022-01-012022-09-30 0000743238us-gaap:TransferredOverTimeMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMembercountry:US2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMembercountry:US2021-01-012021-09-30 0000743238srt:ConsolidationEliminationsMembercountry:US2021-01-012021-09-30 0000743238country:US2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:NonUsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:NonUsMember2021-01-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:NonUsMember2021-01-012021-09-30 0000743238us-gaap:NonUsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMember2021-01-012021-09-30 0000743238srt:ConsolidationEliminationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredAtPointInTimeMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredAtPointInTimeMember2021-01-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredAtPointInTimeMember2021-01-012021-09-30 0000743238us-gaap:TransferredAtPointInTimeMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:TransferredOverTimeMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:TransferredOverTimeMember2021-01-012021-09-30 0000743238srt:ConsolidationEliminationsMemberus-gaap:TransferredOverTimeMember2021-01-012021-09-30 0000743238us-gaap:TransferredOverTimeMember2021-01-012021-09-30 0000743238us-gaap:LandAndLandImprovementsMember2022-09-30 0000743238us-gaap:LandAndLandImprovementsMember2021-12-31 0000743238us-gaap:BuildingAndBuildingImprovementsMember2022-09-30 0000743238us-gaap:BuildingAndBuildingImprovementsMember2021-12-31 0000743238us-gaap:MachineryAndEquipmentMember2022-09-30 0000743238us-gaap:MachineryAndEquipmentMember2021-12-31 0000743238us-gaap:FurnitureAndFixturesMember2022-09-30 0000743238us-gaap:FurnitureAndFixturesMember2021-12-31 0000743238us-gaap:VehiclesMember2022-09-30 0000743238us-gaap:VehiclesMember2021-12-31 0000743238us-gaap:ConstructionInProgressMember2022-09-30 0000743238us-gaap:ConstructionInProgressMember2021-12-31 utr:Y 0000743238srt:MinimumMember2022-01-012022-09-30 0000743238srt:MaximumMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238shyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238shyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238shyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238shyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2022-07-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2022-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238shyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238shyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238shyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238shyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2021-07-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2021-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238shyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238shyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238shyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238shyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2022-01-012022-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehicleSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238shyf:FleetVehicleSalesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:MotorhomeChassisMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238shyf:MotorhomeChassisMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:OtherSpecialtyVehiclesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238shyf:OtherSpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:AftermarketPartsAndAccessoriesSalesMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMembershyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238shyf:AftermarketPartsAndAccessoriesSalesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:FleetVehiclesAndServicesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:OperatingSegmentsMembershyf:SpecialtyVehiclesMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:MaterialReconcilingItemsMemberus-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30 0000743238us-gaap:SegmentContinuingOperationsMember2021-01-012021-09-30
 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 


 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022.

 

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                   to                                  

 

Commission File Number 001-33582

 

THE SHYFT GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)

 

Michigan
(State or Other Jurisdiction of 
Incorporation or Organization)

 

38-2078923
(I.R.S. Employer Identification No.)

41280 Bridge Street
Novi, Michigan
(Address of Principal Executive Offices)

 


48375
(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (517543-6400

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

SHYF

NASDAQ Global Select Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes

 

No

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes

 

No

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller Reporting Company

Emerging Growth Company

   

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).             Yes       No ☒     

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

Outstanding at October 21, 2022

Common Stock

35,070,921 shares

 

 

 

 

 

THE SHYFT GROUP, INC.

 

INDEX
 


 

 

Page

 

   

FORWARD-LOOKING STATEMENTS

3

 

 

   

PART I.  FINANCIAL INFORMATION

   
 

 

 

   
 

Item 1.

Financial Statements:

   
         
   

Condensed Consolidated Balance Sheets – September 30, 2022 and December 31, 2021 (Unaudited)

4  
   

 

   
   

Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

5  
   

 

   
   

Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2022 and 2021 (Unaudited)

6  
         
   

Condensed Consolidated Statement of Shareholders’ Equity – Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)

7  
   

 

   
   

Notes to Condensed Consolidated Financial Statements

8  
   

 

   
 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17  
 

 

 

   
 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27  
 

 

 

   
 

Item 4.

Controls and Procedures

28  
 

 

 

   

PART II.  OTHER INFORMATION

   
         
  Item 1. Legal Proceedings 29  
         
 

Item 1A.

Risk Factors

29  
         
 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29  
         

 

Item 6.

Exhibits

30  

 

 

 

   

SIGNATURES

31  

 

 

 

FORWARD-LOOKING STATEMENTS

 

This Form 10-Q contains some statements that are not historical facts. These statements are called “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve important known and unknown risks, uncertainties and other factors and generally can be identified by phrases using “estimate,” “anticipate,” “believe,” “project,” “expect,” “intend,” “predict,” “potential,” “future,” “may,” “will,” “should” or similar expressions or words. The Shyft Group, Inc.'s (the “Company,” “we,” “us” or “our”) future results, performance or achievements may differ materially from the results, performance or achievements discussed in the forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Risk Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.

 

Risk Factors include the risk factors listed and more fully described in Item 1A – Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on February 24, 2022, subject to any changes and updates disclosed in Part II, Item 1A – Risk Factors below, “Risk Factors”, as well as risk factors that we have discussed in previous public reports and other documents filed with the Securities and Exchange Commission. Those risk factors include the primary risks our management believes could materially affect the potential results described by forward-looking statements contained in this Form 10-Q. However, these risks may not be the only risks we face. Our business, operations, and financial performance could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. In addition, new Risk Factors may emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, although we believe that the forward-looking statements contained in this Form 10-Q are reasonable, we cannot provide you with any guarantee that the results described in those forward-looking statements will be achieved. All forward-looking statements in this Form 10-Q are expressly qualified in their entirety by the cautionary statements contained in this section, and investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company undertakes no obligation to update or revise any forward-looking statements to reflect developments or information obtained after the date this Form 10-Q is filed with the Securities and Exchange Commission.

 

Trademarks and Service Marks

 

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. Solely for convenience, some of the copyrights, trademarks, service marks and trade names referred to in this Quarterly Report on Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trademarks, service marks, trade names and domain names. The trademarks, service marks and trade names of other companies appearing in this Quarterly Report on Form 10-Q are, to our knowledge, the property of their respective owners.

 
3

 

PART I.  FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands) 

 

  September 30,  

December 31,

 
  2022  

2021

 

ASSETS

        

Current assets:

        

Cash and cash equivalents

 $2,862  $37,158 

Accounts receivable, less allowance of $176 and $187

  87,673   87,262 

Contract assets

  87,099   21,483 

Inventories

  111,213   67,184 

Other receivables – chassis pool agreements

  24,277   9,926 

Other current assets

  12,813   10,813 

Total current assets

  325,937   233,826 

Property, plant and equipment, net

  66,970   61,057 

Right of use assets operating leases

  53,156   43,316 

Goodwill

  48,880   48,880 

Intangible assets, net

  50,054   52,981 

Net deferred tax assets

  4,816   4,880 

Other assets

  1,886   2,927 

TOTAL ASSETS

 $551,699  $447,867 
         

LIABILITIES AND SHAREHOLDERS' EQUITY

        

Current liabilities:

        

Accounts payable

 $106,621  $82,442 

Accrued warranty

  6,432   5,975 

Accrued compensation and related taxes

  15,559   19,064 

Contract liabilities

  10,601   988 

Operating lease liability

  10,060   7,934 

Other current liabilities and accrued expenses

  11,703   9,256 

Short-term debt – chassis pool agreements

  24,277   9,926 

Current portion of long-term debt

  190   252 

Total current liabilities

  185,443   135,837 

Other non-current liabilities

  6,576   8,108 

Long-term operating lease liability

  44,660   36,329 

Long-term debt, less current portion

  65,222   738 

Total liabilities

  301,901   181,012 

Commitments and contingent liabilities

          

Shareholders' equity:

        

Preferred stock, no par value: 2,000 shares authorized (none issued)

  -   - 

Common stock, no par value: 80,000 shares authorized; 35,063 and 35,416 outstanding

  90,160   95,375 

Retained earnings

  159,537   171,379 

Total Shyft Group, Inc. shareholders equity

  249,697   266,754 

Non-controlling interest

  101   101 

Total shareholders' equity

  249,798   266,855 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 $551,699  $447,867 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
    2022    

2021

    2022     2021  
                                 

Sales

  $ 286,075     $ 272,622     $ 725,153     $ 714,492  

Cost of products sold

    231,979       216,564       603,008       566,542  

Gross profit

    54,096       56,058       122,145       147,950  
                                 

Operating expenses:

                               

Research and development

    7,051       2,582       19,541       4,304  

Selling, general and administrative

    25,033       25,368       78,445       78,645  

Total operating expenses

    32,084       27,950       97,986       82,949  
                                 

Operating income

    22,012       28,108       24,159       65,001  
                                 

Other income (expense)

                               

Interest expense

    (1,137 )     (253 )     (1,754 )     (310 )

Other income (expense)

    181       54       (342 )     743  

Total other income (expense)

    (956 )     (199 )     (2,096 )     433  
                                 

Income from continuing operations before income taxes

    21,056       27,909       22,063       65,434  

Income tax expense

    3,770       6,910       3,346       15,952  

Income from continuing operations

    17,286       20,999       18,717       49,482  

Income from discontinued operations, net of income taxes

    -       -       -       81  

Net income

    17,286       20,999       18,717       49,563  

Less: net income attributable to non-controlling interest

    -       77       -       1,102  
                                 

Net income attributable to The Shyft Group Inc.

  $ 17,286     $ 20,922     $ 18,717     $ 48,461  
                                 

Basic earnings per share

                               

Continuing operations

  $ 0.49     $ 0.59     $ 0.53     $ 1.37  

Discontinued operations

    -       -       -       -  

Basic earnings per share

  $ 0.49     $ 0.59     $ 0.53     $ 1.37  
                                 

Diluted earnings per share

                               

Continuing operations

  $ 0.49     $ 0.58     $ 0.53     $ 1.34  

Discontinued operations

    -       -       -       -  

Diluted earnings per share

  $ 0.49     $ 0.58     $ 0.53     $ 1.34  
                                 

Basic weighted average common shares outstanding

    35,056       35,346       35,071       35,330  

Diluted weighted average common shares outstanding

    35,365       36,074       35,481       36,024  

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

   

Nine Months Ended September 30,

 
    2022    

2021

 

Cash flows from operating activities:

               

Net income

  $ 18,717     $ 49,563  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    10,055       8,312  

Non-cash stock based compensation expense

    4,922       6,571  

Deferred income taxes

    64       134  

Loss (gain) on disposal of assets

    481       (104 )

Changes in accounts receivable and contract assets

    (66,026 )     (35,842 )

Changes in inventories

    (44,029 )     (35,473 )

Changes in accounts payable

    24,708       43,230  

Changes in accrued compensation and related taxes

    (3,505 )     910  

Changes in accrued warranty

    457       1,626  

Change in other assets and liabilities

    9,663       3,396  

Net cash provided by (used in) operating activities

    (44,493 )     42,323  
                 

Cash flows from investing activities:

               

Purchases of property, plant and equipment

    (14,228 )     (18,238 )
Proceeds from sale of property, plant and equipment     148       16  

Acquisition of business, net of cash acquired

    -       904  

Net cash used in investing activities

    (14,080 )     (17,318 )
                 

Cash flows from financing activities:

               

Proceeds from long-term debt

    120,000       25,000  

Payments on long-term debt

    (55,000 )     (47,400 )

Payment of dividends

    (5,395 )     (2,660 )

Purchase and retirement of common stock

    (26,789 )     (3,348 )

Issuance and vesting of stock incentive awards

    (8,539 )     (3,043 )

Net cash provided by (used in) financing activities

    24,277       (31,451 )
                 

Net decrease in cash and cash equivalents

    (34,296 )     (6,446 )

Cash and cash equivalents at beginning of period

    37,158       20,995  

Cash and cash equivalents at end of period

  $ 2,862     $ 14,549  

 

Note: Consolidated Statements of Cash Flows include continuing operations and discontinued operations for all periods presented.

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)

(In thousands)

 

  

Number of

Shares

  

Common

Stock

  

Retained

Earnings

  

Non-

Controlling

Interest

  

Total

Shareholders

Equity

 

Balance at December 31, 2021

  35,416  $95,375  $171,379  $101  $266,855 

Issuance of common stock and tax impact of stock incentive plan

  3   (8,372

)

  -   -   (8,372

)

Dividends declared ($0.05 per share)

  -   -   (1,794)  -   (1,794

)

Purchase and retirement of common stock

  (607

)

  (1,598

)

  (25,191

)

  -   (26,789

)

Issuance of restricted stock, net of cancellation

  215   -   -   -   - 

Non-cash stock based compensation expense

  -   1,648   -   -   1,648 

Net loss

  -   -   (3,852)  -   (3,852)

Balance at March 31, 2022

  35,027  $87,053  $140,542  $101  $227,696 
Issuance of common stock and tax impact of stock incentive plan  3   (219)  -   -   (219)
Dividends declared ($0.05 per share)  -   -   (1,784)  -   (1,784)
Issuance of restricted stock, net of cancellation  33   -   -   -   - 
Non-cash stock based compensation expense  -   2,060   -   -   2,060 
Net income  -   -   5,283   -   5,283 
Balance at June 30, 2022  35,063   88,894   144,041   101   233,036 
Issuance of common stock and tax impact of stock incentive plan  6   52   -   -   52 
Dividends declared ($0.05 per share)      -   (1,790)  -   (1,790)
Issuance of restricted stock, net of cancellation  (6)  -   -   -   - 
Non-cash stock based compensation expense      1,214   -   -   1,214 
Net income      -   17,286   -   17,286 
Balance at September 30, 2022  35,063   90,160   159,537   101   249,798 

 

  

Number of

Shares

  

Common

Stock

  

Retained

Earnings

  

Non-

Controlling

Interest

  

Total

Shareholders

Equity

 

Balance at December 31, 2020

  35,344  $91,044  $109,286  $(171

)

 $200,159 

Issuance of common stock and tax impact of stock incentive plan

  3   (2,255

)

  -   -   (2,255

)

Dividends declared ($0.025 per share)

  -   -   (983

)

  -   (983

)

Purchase and retirement of common stock

  (100

)

  (260

)

  (3,088

)

  -   (3,348

)

Issuance of restricted stock, net of cancellation

  61   -   -   -   - 

Non-cash stock based compensation expense

  -   1,642   -   -   1,642 

Net income

  -   -   11,576   35   11,611 

Balance at March 31, 2021

  35,308  $90,171  $116,791  $(136

)

 $206,826 
Issuance of common stock and tax impact of stock incentive plan  2   (712)  -   -   (712)
Dividends declared ($0.025 per share)  -   -   (901)  -   (901)
Issuance of restricted stock, net of cancellation  36   -   -   -   - 
Non-cash stock based compensation expense  -   2,850   -   -   2,850 
Net income  -   -   15,963   990   16,953 
Balance at June 30, 2021  35,346   92,309   131,853   854   255,016 
Issuance of common stock and tax impact of stock incentive plan  3   (76)  -   -   (76)
Dividends declared ($0.025 per share)  -   -   (902)  -   (902)
Issuance of restricted stock, net of cancellation  (7)  -   -   -   - 
Non-cash stock based compensation expense  -   2,079   -   -   2,079 
Net income  -   -   20,922   77   20,999 
Balance at September 30, 2021  35,342   94,312   151,873   931   247,116 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)

 

NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 

As used herein, the term “Company”, “we”, “us” or “our” refers to The Shyft Group, Inc. and its subsidiaries unless designated or identified otherwise.

 

Nature of Operations

 

We are a niche market leader in specialty vehicle manufacturing and assembly for the commercial vehicle (including last-mile delivery, specialty service and vocation-specific upfit segments) and recreational vehicle industries. Our products include walk-in vans and truck bodies used in e-commerce/parcel delivery, upfit equipment used in the mobile retail and utility trades, service and vocational truck bodies, luxury Class A diesel motor home chassis and contract manufacturing and assembly services. We also supply replacement parts and offer repair, maintenance, field service and refurbishment services for the vehicles that we manufacture as well as truck accessories.

 

The accompanying unaudited interim condensed consolidated financial statements reflect all normal and recurring adjustments that are necessary for the fair presentation of our financial position as of September 30, 2022, and our results of operations and cash flows for the three and nine months ended September 30, 2022. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on February 24, 2022. The results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the results expected for the full year.

 

For a description of key accounting policies followed, refer to the notes to The Shyft Group, Inc. consolidated financial statements for the year ended December 31, 2021, included in our Annual Report on Form 10-K.

 

Supplemental Disclosures of Cash Flow Information

 

Non-cash investing in the nine months ended September 30, 2022 and September 30, 2021, included $982 and $394 of capital expenditures, respectively. The Company has chassis pool agreements, where it participates in chassis converter pools that are non-cash arrangements and they are offsetting between current assets and current liabilities on the Company’s Consolidated Balance Sheets. See "Note 4 – Debt" for further information about the chassis pool agreements.

 

NOTE 2 – DISCONTINUED OPERATIONS

 

On February 1, 2020, we completed the sale of our emergency response vehicle ("ERV") business for $55,000 cash subject to certain post-closing adjustments. In September 2020, the Company finalized the post-close net working capital adjustment and subsequently paid $7,500 on October 1, 2020. The results of the ERV business have been reclassified to Income from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021.

 

The Income from discontinued operations presented in the Condensed Consolidated Statement of Operations are summarized below:

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
    2022    

2021

    2022     2021  

Other income

  $ -     $ -     $ -     $ 109  

Income from discontinued operations before taxes

    -       -       -       109  

Income tax expense

    -       -       -       (28 )

Income from discontinued operations, net of income taxes

  $ -     $ -     $ -     $ 81  

 

There were no depreciation and amortization expenses or capital expenditures for the discontinued operations for the three and nine months ended September 30, 2022 and 2021.

 

8

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)

 

NOTE 3 – INVENTORIES

 

Inventories are summarized as follows:

 

   

September 30,

2022

   

December 31,
2021

 

Finished goods

  $ 4,685     $ 2,990  

Work in process

    8,176       2,471  

Raw materials and purchased components

    98,352       61,723  

Total inventories

  $ 111,213     $ 67,184  
 

NOTE 4  DEBT

 

Short-term debt consists of the following:

 

   

September 30,
2022

   

December 31,
2021

 

Chassis pool agreements

  $ 24,277     $ 9,926  

Total short-term debt

  $ 24,277     $ 9,926  

 

Chassis Pool Agreements

 

The Company obtains certain vehicle chassis for its walk-in vans, truck bodies and specialty vehicles directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers with receipt at our facilities dependent on manufacturer’s production schedules. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at the Company’s facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. In addition, the manufacturer typically retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer).

 

Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled any related obligations in cash, nor does it expect to do so in the future. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. The Company has included this financing agreement on the Company’s Condensed Consolidated Balance Sheets within Other receivables – chassis pool agreements and Short-term debt – chassis pool agreements. Typically, chassis are converted and delivered to customers within 90 days of the receipt of the chassis by the Company. The chassis converter pool is a non-cash arrangement and is offsetting between Current assets and Current liabilities on the Company’s Condensed Consolidated Balance Sheets.

 

Long-term debt consists of the following:

 

   

September 30,
2022

   

December 31,
2021

 

Line of credit revolver

  $ 65,000     $ -  

Finance lease obligation

    412       450  

Other

    -       540  

Total debt

    65,412       990  

Less current portion of long-term debt

    (190 )     (252

)

Total long-term debt

  $ 65,222     $ 738  

 

 

9

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)


Line of Credit Revolver

 

On November 30, 2021, we entered into an Amended and Restated Credit Agreement (the "Credit Agreement") by and among us and certain of our subsidiaries as borrowers, Wells Fargo Bank, N.A. ("Wells Fargo"), as administrative agent, and the lenders party thereto consisting of Wells Fargo, JPMorgan Chase Bank, N.A., PNC Bank, National Association and Bank of America, N.A. (the "Lenders"). Certain of our other subsidiaries have executed guaranties guarantying the borrowers' obligations under the Credit Agreement.

 

Under the Credit Agreement, we may borrow up to $400,000 from the Lenders under a secured revolving credit facility which matures November 30, 2026. We may also request an increase in the facility of up to $200,000 in the aggregate, subject to customary conditions. The credit facility is also available for the issuance of letters of credit of up to $20,000 and swing line loans of up to $10,000, subject to certain limitations and restrictions. This revolving credit facility carries an interest rate of either (i) the highest of prime rate, the federal funds effective rate from time to time plus 0.5%, or the one month adjusted LIBOR plus 1.0%; or (ii) adjusted LIBOR, in each case plus a margin based upon our ratio of debt to earnings from time to time. The applicable borrowing rate including the margin was 4.14% (or one-month LIBOR plus 1.00%) at September 30, 2022. The credit facility is secured by security interests in, and liens on, all assets of the borrowers and guarantors, other than real property and certain other excluded assets. At September 30, 2022 and December 31, 2021, we had outstanding letters of credit totaling $1,100 and $760, respectively, related to our workers’ compensation insurance.

 

Under the terms of our Credit Agreement, available borrowings (exclusive of outstanding borrowings) totaled $165,441 and $376,776 at September 30, 2022 and December 31, 2021, respectively. The Credit Agreement requires us to maintain certain financial ratios and other financial covenants; prohibits us from incurring additional indebtedness; limits certain acquisitions, investments, advances or loans; limits our ability to pay dividends in certain circumstances; and restricts substantial asset sales, all subject to certain exceptions and baskets. At September 30, 2022 and December 31, 2021, we were in compliance with all covenants in our Credit Agreement.

 

NOTE 5 – REVENUE

 

Changes in our contract assets and liabilities for the nine months ended September 30, 2022 and 2021 are summarized below:

 

   

September 30,

2022

   

September 30,

2021

 

Contract Assets

               

Contract assets, beginning of period

  $ 21,483     $ 9,414  

Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional

    (21,482 )     (9,414 )

Contract assets recognized, net of reclassification to receivables

    87,098       42,459  

Contract assets, end of period

  $ 87,099     $ 42,459  
                 

Contract Liabilities

               

Contract liabilities, beginning of period

  $ 988     $ 756  

Reclassification of the beginning contract liabilities to revenue, as the result of performance obligations satisfied

    (988 )     (743 )

Cash received in advance and not recognized as revenue

    10,601       2,135  

Contract liabilities, end of period

  $ 10,601     $ 2,148  

 

The aggregate amount of the transaction price allocated to remaining performance obligations in existing contracts that are yet to be completed in the Fleet Vehicles and Services ("FVS") and Specialty Vehicles ("SV") segments are $915,135 and $128,769, respectively.

 

10

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except per share data)

 

In the following tables, revenue is disaggregated by primary geographical market and timing of revenue recognition. The tables also include a reconciliation of the disaggregated revenue with the reportable segments.

 

   

Three Months Ended

September 30, 2022

 
   

FVS

   

SV

   

Eliminations and

Other

   

Total

 

Primary geographical markets

                               

United States

  $ 183,409     $ 103,869     $ (2,335 )   $ 284,943  

Other

    1,085       47       -       1,132  

Total sales

  $ 184,494     $ 103,916     $ (2,335 )   $ 286,075  
                                 

Timing of revenue recognition

                               

Products transferred at a point in time

  $ 10,821     $ 58,729     $ -     $ 69,550  

Products and services transferred over time

    173,673       45,187       (2,335 )     216,525  

Total sales

  $ 184,494     $ 103,916     $ (2,335 )   $ 286,075  

  

   

Three Months Ended

September 30, 2021

 
   

FVS

   

SV

   

Eliminations and

Other

   

Total

 

Primary geographical markets

                               

United States

  $ 186,914     $ 81,230     $ -     $ 268,144  

Other

    4,473       5       -       4,478  

Total sales

  $ 191,387     $ 81,235     $ -     $ 272,622  
                                 

Timing of revenue recognition

                               

Products transferred at a point in time

  $ 8,949     $ 50,286     $ -     $ 59,235  

Products and services transferred over time

    182,438       30,949       -       213,387  

Total sales

  $ 191,387     $ 81,235     $ -     $ 272,622  

   

   

Nine Months Ended

September 30, 2022

 
   

FVS

   

SV

   

Eliminations and

Other

   

Total

 

Primary geographical markets

                               

United States

  $ 428,606     $ 293,325     $ (2,335 )   $ 719,596  

Other

    5,482       75       -       5,557  

Total sales

  $ 434,088     $ 293,400     $ (2,335 )   $ 725,153  
                                 

Timing of revenue recognition

                               

Products transferred at a point in time

  $ 31,092     $ 163,068     $ -     $ 194,160  

Products and services transferred over time

    402,996       130,332       (2,335 )     530,993  

Total sales

  $ 434,088     $ 293,400     $ (2,335 )   $ 725,153  

   

11

 

   THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)

 

   

Nine Months Ended

September 30, 2021

 
   

FVS

   

SV

   

Eliminations and

Other

   

Total

 

Primary geographical markets

                               

United States

  $ 468,725     $ 237,608     $ -     $ 706,333  

Other

    8,104       55       -       8,159  

Total sales

  $ 476,829     $ 237,663     $ -     $ 714,492  
                                 

Timing of revenue recognition

                               

Products transferred at a point in time

  $ 24,197     $ 141,737     $ -     $ 165,934  

Products and services transferred over time

    452,632       95,926       -       548,558  

Total sales

  $ 476,829     $ 237,663     $ -     $ 714,492  
 

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment are summarized by major classifications as follows:

 

   

September 30,

2022

   

December 31,

2021

 

Land and improvements

  $ 12,554     $ 9,810  

Buildings and improvements

    43,557       45,724  

Plant machinery and equipment

    52,872       49,305  

Furniture and fixtures

    15,441       20,421  

Vehicles

    2,057       2,607  

Construction in process

    10,396       12,700  

Subtotal

    136,877       140,567  

Less accumulated depreciation

    (69,907 )     (79,510

)

Total property, plant and equipment, net

  $ 66,970     $ 61,057  

 

We recorded depreciation expense of $2,404 and $2,138 during the three months ended September 30, 2022 and 2021, respectively, and $7,155 and $5,778 during the nine months ended September 30, 2022 and 2021, respectively.

 

NOTE 7 – LEASES

 

We have operating and finance leases for land, buildings and certain equipment. Our leases have remaining lease terms of one year to 18 years, some of which include options to extend the leases for up to 15 years. Our leases do not contain residual value guarantees. Assets recorded under finance leases were immaterial (See "Note 4 – Debt").

 

Operating lease expenses are classified as Cost of products sold and Operating expenses on the Condensed Consolidated Statements of Operations. The components of lease expense were as follows:

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
   

2022

   

2021

    2022     2021  

Operating leases

  $ 2,683     $ 2,048     $ 7,492     $ 5,984  

Short-term leases(1)

    87       135       144       301  

Total lease expense

  $ 2,770     $ 2,183     $ 7,636     $ 6,285  

 

(1Includes expenses for month-to-month equipment leases, which are classified as short-term as the Company is not reasonably certain to renew the lease term beyond one month.

 

12

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)

 

The weighted average remaining lease term and weighted average discount rate were as follows:

 

   

September 30,

 
   

2022

   

2021

 

Weighted average remaining lease term of operating leases (in years)

    8.2       9.2  

Weighted average discount rate of operating leases

    2.7 %     3.0

%

 

Supplemental cash flow information related to leases was as follows:

 

   

Nine Months Ended

September 30,

 
   

2022

   

2021

 

Cash paid for amounts included in the measurement of lease liabilities:

               

Operating cash flow for operating leases

  $ 6,874     $ 5,870  
                 

Right of use assets obtained in exchange for lease obligations:

               

Operating leases

  $ 16,367     $ 6,305  
Finance leases   $ 202     $ 106  

 

Maturities of operating lease liabilities as of September 30, 2022 are as follows:

 

Years ending December 31:

       

2022(1)

  $ 5,128  

2023

    10,214  

2024

    9,472  

2025

    8,328  

2026

    6,672  

Thereafter

    24,056  

Total lease payments

    63,870  

Less: imputed interest

     (9,150) )

Total lease liabilities

  $ 54,720  

 

(1Excluding the nine months ended September 30, 2022.

 

NOTE 8 – COMMITMENTS AND CONTINGENT LIABILITIES

 

At September 30, 2022, we and our subsidiaries were parties, both as plaintiff and defendant, to a number of lawsuits and claims arising out of the normal course of our businesses. In the opinion of management, our financial position, future operating results or cash flows will not be materially affected by the final outcome of these legal proceedings.

 

Warranty Related

 

We provide limited warranties against assembly/construction defects. These warranties generally provide for the replacement or repair of defective parts or workmanship for a specified period following the date of sale. The end users also may receive limited warranties from suppliers of components that are incorporated into our chassis and vehicles.

 

13

 

THE SHYFT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except per share data)

 

Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. Infrequently, a material warranty issue can arise which is beyond the scope of our historical experience. We provide for any such warranty issues as they become known and are estimable. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters beyond the scope of our historical experience. An estimate of possible penalty or loss, if any, cannot be made at this time.

 

Changes in our warranty liability are summarized below:

 

   

Nine Months Ended

September 30,

 
   

2022

   

2021

 

Balance of accrued warranty at January 1

  $ 5,975     $ 5,633  

Provisions for current period sales

    3,597       2,720  
Changes in liability for pre-existing warranties     430       1,958  

Cash settlements

    (3,570 )     (3,052 )
Acquired     -       289  

Balance of accrued warranty at September 30

  $ 6,432     $ 7,548  

 

Legal Proceedings Relating to Environmental Matters

 

As previously disclosed, in May 2020, the Company received an information request from the United States Environmental Protection Agency (“EPA”) requesting certain information regarding emissions labels on chassis, vocational vehicles, and vehicles that the Company manufactured or imported into the U.S. between January 1, 2017 to the date the Company received the request in May 2020. The Company responded to the EPA’s request and furnished the requested materials in the third quarter of 2020. 

 

On April 6, 2022, the Company received a Notice of Violation from the EPA alleging a failure to secure certain certifications on manufactured chassis and a failure to comply with recordkeeping and reporting requirements related to supplier-provided chassis. The Company continues to investigate this matter, including potential defenses, and will continue discussions with the EPA regarding the allegations. At this time, it is not possible to estimate the potential fines or penalties that the Company may incur (if any) for this matter.

 

NOTE 9 – TAXES ON INCOME

 

Our effective income tax rate was 17.9% and 24.8% for the three months ended September 30, 2022 and 2021, respectively, and 15.2% and 24.4% for the nine months ended September 30, 2022 and 2021, respectively.

 

The effective tax rate for the three months ended September 30, 2022 is lower than the U.S. statutory tax rate of 21.0% primarily due an increase in the tax benefit of research credits, whereas the rate for the same period in 2021 was higher than the U.S. statutory tax rate due to non-deductible executive compensation and state income taxes.

 

Our effective income tax rate for the first nine months of 2022 at 15.2% was lower as compared to 24.4% in the first nine months of 2021 primarily because of the tax benefit from increased research credits in 2022.