Fellow Shareholders

This past year was another challenging year for our team at The Shyft Group. Resiliency became the true test for winning in this environment, contributing to a remarkable year for the Shyft Group.

The impact of COVID-19 continued to challenge our resources and supply chain while simultaneously driving immense demand for our products in last-mile delivery and infrastructure. Our team proactively managed through it all with resourcefulness and relentless focus on execution for our customers to deliver consistent, industry-leading results quarter after quarter. In fact, it was a year of records for us – delivering $108M of adjusted EBITDA on 47% revenue growth. We generated significant cash and took our debt down to zero while nearly doubling our investment in R&D to position us for our next stage of growth.

Capping off a record year, the Shyft Group was honored as one of Fortune’s 100 Fastest-Growing Companies. We were excited to be recognized in this way as we continue executing our strategy and focusing on high-value, high-growth markets – a journey that began in 2015.

Our leadership emphasizes we must be agile, nimble, flexible, proactive, and solution-based in everything we do. Last year was both humbling and rewarding, seeing that approach in action – and a great reminder of what is truly possible with the right strategy and the right team.

A primary example is our Velocity® F2 walk-in van, which made its debut delivering packages around the country in 2021. The team listened to our customers’ need for a new product that would help meet their rapidly growing e-commerce and delivery demand and answered by creating an entirely new category of purpose-built Class 2 walk-in delivery vehicles. This customer-driven, solution-focused innovation exemplifies the Shyft Group DNA and is key to our ongoing success.

We continued to invest and strengthen our core to meet evolving trends, such as electrification. We announced a plan to build our own EV chassis and last-mile electric delivery vehicle last June in support of a more environmentally sustainable future for all. By leveraging our 50-year heritage in chassis manufacturing for specialty vehicles and body building for last-mile delivery with exceptional engineering talent, we unveiled a prototype at NTEA Work Truck Week in March of 2022, receiving an extremely positive response from our customers. I’m proud to say we are undoubtedly wellpositioned in the EV space.

The Shyft Group is energized for the future – not only for the business opportunities that lie ahead with new customers, acquisitions, and innovations, but to continue focusing on our people. Ultimately, having an inclusive, diverse culture that harnesses employees’ individual and unique talents, experience, spirit, and passion is what allows the Shyft team to continually outperform the market and drive our strategy forward.

We are very focused on our future and look forward to continued success and driving shareholder value.

The Year in Review

Last year, our industry once again felt the ongoing impact of the COVID-19 pandemic, culminating in supply constraints, inflation, and labor shortages. Yet even when faced with these unprecedented challenges, our teams demonstrated an unparalleled resilience that energized the organization.

This resilience, fortified with innovative, purpose-built solutions, and a neverending focus on the customer, accelerated our growth momentum, delivering the Shyft Group another historic year. This record success is a testament to our team’s relentless commitment to excellence and true embodiment of our vision, mission, and values.

When the world shifts, so do we — and we’re confident that this positive momentum, driven by our strong, focused leadership and dedicated workforce, will continue to propel us forward — energized for the future.

Shyft at a Glance

$676MM

Revenue

3,000

Employees

7

Brands

27

Operations

10

States

Charlotte, MI

1541 Reynolds Rd
Charlotte, MI 48813

Phone: 517-543-6400

Corporate Headquarters

Novi, MI

41280 Bridge St
Novi, MI 48375

Phone: 517-543-6400

Bristol, IN

1650 Commerce Dr
Bristol, IN 46507

Phone: 800-582-3454

Bristol, IN

603 Earthway Blvd
Bristol, In 46507

Phone: 800-582-3454

Charlotte, MI

1549 Mikesell St.
Charlotte, MI 48813

Phone: 517-543-6400

Ephrata, PA

64 Cocalico Creek Rd
Ephrata, PA 17522

Phone: 800-582-3454

Saltillo, Coahuila de Zaragoza, MEX

Servidumbre de Paso No. 851-C-2 Lote: C-2
Col: Parque Industrial Santa Mónica
Saltillo, Coahuila de Zaragoza, México, CP 25300

Phone (US): 574-848-2091
Phone (MX): 844-454-8690

Montebello, CA

1130 S. Vail Ave.
Montebello, CA 90640-6021

Phone: 323-276-1933

North Charleston, SC

6555 Fain Street
North Charleston, SC 29406

Phone: 843-203-7400

Kansas City, MO

9701 NE Parvin Rd. Suite 100
Kansas City, MO 64161

Carson, CA

24200 S. Main St.
Carson, CA 90745

Phone: 562-633-9951

McClellan, CA

4242 Forcum Ave. Bldg. B-640 Ste. 400
McClellan Park, CA 95652

Phone: 916-921-2639

Mesa, AZ

900 W. 1st Ave.
Mesa, AZ 85210

Phone: 602-426-1774

Dallas, TX

3000 W. Commerce, Ste. 110
Dallas, TX 75212

Phone: 469-480-7135

Weatherford, TX

126 Bennett Hills Dr.
Weatherford, TX 76088

Phone: 817-439-5755

Pompano Beach, FL

2681 Hammondville Rd
Pompano Beach, FL 33069

Phone: 954-946-9955

Jupiter, FL

15335 Park of Commerce Blvd
Jupiter, FL 33478

Phone: 954-946-9955

Charlotte, MI

1000 Reynolds Rd.
Charlotte, MI 48813

Phone: 517-543-6400

Charlotte, MI

1111 Mikesell St.
Charlotte, MI 48813

Phone: 517-543-6400

Charlotte, MI

1023 Reynolds Rd.
Charlotte, MI 48813

Phone: 517-543-6400

Charlotte, MI

1055 Mikesell St.
Charlotte, MI 48813

Phone: 517-543-6400

Charlotte, MI

1065 Mikesell St.
Charlotte, MI 48813

Phone: 517-543-6400

Waterville, ME

977 W. River Road, #3
Waterville, ME 04901

Phone: 207-660-4700

  • Novi, Michigan (Headquarters)
  • Charlotte, Michigan
  • Pompano Beach, Florida
  • West Palm Beach, Florida
  • Bristol, Indiana (South)
  • Bristol, Indiana (North)
  • Charlotte, Michigan (Plant 4)
  • Ephrata, Pennsylvania
  • North Charleston, South Carolina
  • Kansas City, Missouri
  • Montebello, California
  • Saltillo, Coahuila de Zaragoza, MEX
  • Charlotte, Michigan (Plant 1)
  • Charlotte, Michigan (Plant 7)
  • Carson, California
  • McClellan Park, California
  • Mesa, Arizona
  • Dallas, Texas
  • Weatherford, Texas
  • Charlotte, Michigan (Plant 12)
  • Charlotte, Michigan (Plant 5)
  • Charlotte, Michigan (Plant 6)
  • Waterville, Maine

Fleet Vehicles & Services (FVS)

Fleet Vehicles and Services includes delivery vehicles, specialty service trucks, truck bodies, upfits, field services, and aftermarket parts, and goes to market under Utilimaster®, not only met growing demand in last-mile delivery from existing customers, but continues to make efforts to diversify our business opportunities to capitalize on growing trends in last-mile delivery, such as grocery – all while navigating the macroeconomic challenges of a global pandemic.

Financial Summary

Segment sales for the year totaled $659.4 million, an outstanding increase of 42.3% from $463.5 million, reflecting strong sales across all product categories. The increase was driven by robust last-mile delivery demand, including Velocity and truck body sales.

Adjusted EBITDA increased $25.3 million to $108.6 million, or 16.5% of sales, from $83.3 million, or 18.0% of sales, in 2020. The increase was primarily caused by a favorable mix of productivity and pricing actions, and it was offset by higher material and labor costs. Further, the segment backlog totaled a record $859.4 million, up a record 103.9%. The year-over-year increase was driven by last-mile delivery vehicles as well as the USPS truck body add-on order of $53 million.

Organic Growth

Overall, FVS growth was driven by two key factors – traditional walk-in vans and Velocity walk-in vans. Last year, we secured an initial customer order of approximately 400 units for our Velocity M3™ last-mile delivery vehicle and dedicated resources to continuous improvement measures for our Velocity F2 walk-in van per customer requests. As the leading manufacturer of last-mile delivery vehicles, we’re energized by the potential this unique category has to offer.

A critical component of our long-term FVS strategy is to identify and evaluate ways we can expand into new locations with new customers, such as grocery delivery. We know this market has significant growth potential, as we secured business with multiple new customers last year alone. We’re excited to explore additional opportunities with these new players and others moving forward.

Truck bodies have also led to organic growth opportunities in middle mile and new vocations, two integral areas of our FVS business strategy. Securing our largest backlog in history, our truck body business remains key to our ongoing success. The additional growth has prompted a geographic expansion, culminating in a 250,000 square foot facility set to open in 2022.

Operational Improvements

To further support this growth, we strengthened our continuous improvement efforts, leveraging our flexible manufacturing approach, production automation, and insourcing practices – such as in-house fabrication – which helped drive efficiencies and cost savings as we worked through a tough supply environment. We’ve seen a significant increase in overall production capacity at our Bristol location and look forward to actioning our continuous improvement experience with our other locations.

Product Innovations

Customer centricity is in our DNA, and so is innovation. During 2021, we worked with Ford Pro to produce two pilot vehicles on the all-electric Ford E-Transit chassis. These Class 2 pilot vehicles fit with our Velocity body, creating a walk-in van comparable to the Velocity F-Series gas-powered vehicle. These pilot vehicles are road-ready and will be in use beginning 2023.

We are confident that with our exceptional team, innovative solutions, and ability to integrate our products on multiple OEM chassis, we will continue driving organic growth with new product development and customer-focused innovation.

Specialty Vehicles (SV)

Specialty Vehicles includes service bodies, contract manufacturing, upfits and accessories, and Class A diesel luxury motor coach chassis going to market under Royal Truck Body, DuraMag®, Magnum®, Builtmore Contract Manufacturing™, Strobes R US, and Spartan® RV Chassis. The strength of our innovative products and underlying markets resulted in strong revenues and orders as we continued to execute our service body growth strategy by expanding production and leveraging flexible manufacturing.

Financial Summary

SV segment sales were $332.4 million, an increase of 56.4% from $212.5 million, led by strong growth in luxury motor coach chassis sales and service bodies. Adjusted EBITDA was $32.7 million, or 9.8% of sales, compared to $20.9 million, or 9.8% of sales, a year ago. The increase was caused by mix, productivity, and pricing actions, and it was offset by higher material and labor costs.

The segment backlog totaled $104.1 million, up 82.3% compared to $57.1 million last year.

Organic Growth

Key to our growth strategy is value creation – one way we achieve this is through geographic expansion. We are executing our strategy to become a nationwide player in service bodies, leveraging synergies from the eastern and western distribution channels of DuraMag® and Royal Truck Body to form a truly national offering with galvannealed steel and aluminum suitable for varying climates.

In our Builtmore Contract Manufacturing business, we are excited to work closely with our partner Isuzu on the launch of their latest F-Series vehicle. We are optimistic about this vehicle’s prospects and look forward to continuing to ramp up volume into 2022.

Continuous Operational Improvement

We made capital improvements to enhance productivity through automation, deployed lean manufacturing techniques throughout our operations, and executed vertical integration opportunities, bringing production of components or subassemblies in house. The strength of our operating system was further demonstrated by our Duramag production facilities, where we have offset personnel shortages and doubled capacity since the acquisition of Duramag.

Innovation

Product innovation is the core competency for the SV business.

Last year, we announced our all-aluminum service body, the S-Series, with a powder coating to withstand the rigors of any job site and climate. We’ve known there’s a growing interest in lightweight aluminum, and our acquisition of Duramag reflects this.

In our motorhome business, demand for our luxury motorcoach chassis continues, resulting in increased market share. This growth reflects the strength of our product offerings and brand among luxury motorhome consumers. We continue innovating to foster this momentum, such as by creating new safety features under our Advanced Protection System®, which offers integrated collision mitigation, stability control, lane departure warnings, tire pressure monitoring, integrated trailer braking, and blind spot cameras to enhance motorhome safety.

We have a winning formula, supported by a very talented team, that we believe will result in strong top- and bottom-line growth moving forward.

Energized for the Future

This past year was momentous for our organization, from the resiliency of our team and the innovations we launched to the results we achieved. But while we enjoy the success of the past year, we cannot afford to stand still.

We will continue innovating to expand our market leadership across the industries we serve. We will maintain our client-centric focus by anticipating and responding in new, creative ways to meet their needs. We will remain nimble and creative in our approach, investing in our teams, operations, and technologies to drive our growth.

We are confident, purpose-driven, and energized for the future.