The Shyft Group reported its third-quarter results Thursday morning, which reflect the divestiture of its Emergency Response business, effective Feb. 1. The company said the move was part of its “transformational strategy to further focus on accelerating growth and profitability.” The financial results of the ER business have been classified as discontinued operations for all periods presented.
Sales for the three and nine-month periods ending Sept. 30, 2019, include $23.0 million and $91.4 million, respectively, of pass-through revenues from the one-time USPS truck body order (USPS order).
Third-quarter highlights for 2020 included:
–Sales of $203.5 million, a decrease of $21.2 million, or 9.4 percent, from $224.7 million. Sales increased $1.8 million, or 0.9 percent, excluding the USPS order.
–A gross profit margin of 24.9 percent of sales, an 800 basis point improvement from 16.9 percent of sales, driven by product mix, improved material costs and actions taken to improve overall operating efficiency. Income from continuing operations of $19.4 million, or $0.54 per share, compared to $13.1 million, or $0.37 per share.
–Adjusted EBITDA of $32.6 million, or 16.0 percent of sales, an increase of $10.3 million, or 46 percent, from $22.3 million, or 9.9 percent of sales. The USPS order reduced adjusted EBITDA as a percentage of sales by approximately 110 basis points in the prior year.
–Adjusted net income of $22.1 million, or $0.62 per share, an increase of $6.2 million, or 39.7 percent, from $15.9 million, or $0.45 per share.
–Generated $32.4 million of cash from operating activities during the third quarter of 2020, providing $143.7 million of total liquidity.
–Consolidated backlog at Sept. 30, 2020, totaled $280.6 million, up $16.9 million, or 6.4 percent, compared to $263.7 million at Sept. 30, 2019. Since Sept. 30, 2020, consolidated backlog has increased approximately $46 million, to $326 million in October, reflecting strong demand for parcel delivery vehicles.
–Purchased F3 MFG (“F3”), a leading aluminum service body and accessory manufacturer of the DuraMag and Magnum brands, effective Oct. 1, 2020.
In the Specialty Vehicles (SV) segment, sales were $58.3 million, an increase of 29.2 percent, from $45.1 million due to higher luxury motor coach chassis sales and the Royal Truck Body (Royal) acquisition completed in September 2019. Adjusted EBITDA increased $3.1 million to $7.2 million, or 12.3 percent of sales, from $4.1 million, or 9.0 percent of sales, a year ago.
The increase was primarily due to volume and the Royal acquisition. Shyft said the SV segment also experienced a backlog on Sept. 30, 2020, which totaled $51.8 million, up 29.6 percent compared to $39.9 million on Sept. 30, 2019, due to increased luxury motor coach chassis orders.
“I am extremely proud of our team and of our performance this quarter, as we navigated the pandemic resulting in the most profitable quarter in our company’s history,” said Daryl Adams, president and CEO. “The strong performance reflects growing momentum from our transformative efforts to focus on higher growth and margin opportunities in parcel delivery supporting ecommerce and specialty vehicles.”