The Shyft (SHYF) - 2024 Q4 - Annual Report

Financial Performance - Total sales decreased by $86.0 million, or 9.9$786.2 million in 2024 from $872.2 million in 2023[211] - Gross margin increased to 20.0$6.8 million, or 4.5%, to $157.2 million[218] - Net loss for 2024 was ($2.8) million, a decrease of $9.3 million, or 143.0$6.5 million in 2023[223] - Net income for the year ended December 31, 2024, was a loss of $2.8 million, compared to a net income of$6.5 million for the year ended December 31, 2023[227] - Sales in the Fleet Vehicles and Services (FVS) segment decreased by $107.4 million, or 19.8$434.2 million in 2024 from $541.6 million in 2023[232] - Adjusted EBITDA for the FVS segment increased by$0.9 million to $31.2 million in 2024, representing a margin of 7.2$13.2 million, or 3.9%, to $347.9 million in 2024 compared to$334.7 million in 2023[236] - Adjusted EBITDA for the SV segment was $67.3 million for the year ended December 31, 2024, an increase of$1.1 million compared to $66.2 million in 2023[237] Operating Expenses and Cash Flow - Operating expenses increased by$9.5 million, or 6.6%, to $153.1 million in 2024, with research and development expenses decreasing by$8.9 million[219] - Cash provided by operating activities decreased by $26.1 million to$30.1 million in 2024 from $56.2 million in 2023[242] - The company used$61.2 million in investing activities during 2024, a $40.1 million increase compared to$21.1 million in 2023, primarily due to increased acquisitions[243] - The company generated $37.0 million of cash through financing activities in 2024, compared to$36.7 million used in 2023[244] Debt and Financial Obligations - Total debt amounts to $106.289 million, with$5.890 million due within one year and $100.399 million due in 1-3 years[258] - Operating lease obligations total$48.226 million, with $10.924 million due within one year[258] - As of December 31, 2024, the company had$95 million in debt under its revolving credit facility, with a potential $1 million increase in interest expense for a 100 basis point rise in rates[288] - Interest expense increased by$2.0 million to $8.5 million in 2024 due to additional borrowings and higher borrowing costs[220] Strategic Initiatives - The company acquired Independent Truck Upfitters for cash consideration of$49.9 million, with an additional earn-out of up to $8.0 million, enhancing service body product offerings[213] - The company announced the deployment of the Rapid Driver Cooling System in 5,860 walk-in vans, improving cabin temperature efficiency[213] - The merger with Aebi Schmidt is expected to close in mid-2025, with the company holding approximately 48$313.2 million, down from $409.3 million at the end of 2023[211] - Order backlog for the FVS segment decreased by$80.2 million, or 24.7%, to $244.8 million at December 31, 2024, primarily due to softer parcel delivery vehicle demand[235] - The company is exposed to commodity price fluctuations, particularly in steel and aluminum, and engages in pre-buys to mitigate risks[289] - No material changes in market risk exposures are expected in the near term, defined as one year following the most recent balance sheet[290] Other Financial Information - The company has authorized a stock repurchase of up to$250 million, with no expiration date on the authorization[259] - Dividends of $0.05 per share were paid in 2024 and 2023, with consistent payments across multiple quarters[261] - Goodwill impairment testing showed no risk of impairment for both reporting units as of October 1, 2024[273] - Revenue recognition is primarily based on contracts with customers, with most revenue recognized at the point of sale or over time as obligations are fulfilled[264] - The company evaluates deferred income tax assets based on future taxable income forecasts and adjusts valuation allowances as necessary[281]