Shyft : Third Quarter 2023 Earnings Call Supplemental Presentation

Third Quarter 2023 Earnings Conference Call

October 26, 2023

Forward-Looking Statement

This presentation contains information, including our sales and earnings guidance, all other information provided with respect to our outlook for 2023 and future periods, and other statements concerning our business, strategic position, financial projections, financial strength, future plans, objectives, and the performance of our products and operations that may constitute "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. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in those sections. Generally, we have identified such forward-looking statements by using words such as "believe," "expect," "intend," "potential," "future," "may," "will," "should," and similar expressions or by using future dates in connection with any discussion of, among other things, the construction or operation of new or existing facilities, operating performance, trends, events or developments that we expect or anticipate will occur in the future, statements relating to volume changes, share of sales and earnings per share changes, anticipated cost savings, potential capital and operational cash improvements, anticipated disruptions to our operations and industry due to the COVID-19 pandemic, changes in supply and demand conditions and prices for our products, trade duties and other aspects of trade policy, statements regarding our future strategies, products and innovations, and statements expressing general views about future operating results. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.Forward-looking statements are not historical facts, but instead represent only the Company's beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and our present expectations or projections. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, and those described from time to time in our reports filed with the Securities and Exchange Commission (SEC), which are available at www.sec.gov or our website. All forward-looking statements in this presentation are qualified by this paragraph. Investors should not place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to publicly update or revise any forward-looking statements in this presentation, whether as a result of new information, future events, or otherwise.

© 2023 THE SHYFT GROUP, INC.	2

Shyft Group 3Q23 Highlights

• We delivered third quarter results in line with our expectations led by our infrastructure and vocational related businesses. The parcel and motorhome end-markets continue to be highly dynamic, and our team is focused on driving operational and commercial actions as we close out the year. "

$201.3M

Sales

$4.5M

Net

Income

$11.0M

Adjusted

EBITDA

$9.2M

Operating Cash Flow

© 2023 THE SHYFT GROUP, INC.	3

Market Commentary

Business Segment

Fleet Vehicles and Services

Specialty Vehicles

End Market Dynamics

Long-term demand trends remain intact given

the secular shift to e-commerce

Near-termlast-mile vehicle demand challenged by elevated dealer inventories and economic uncertainty

OEM chassis production reduced significantly since July

Strong demand for vocational work trucks

RV market remains soft, impacting OEM production

Backlog

(Sept 30, 2023)

$383M

$53M

$28M

End markets remains dynamic; Monitoring current strike impact

© 2023 THE SHYFT GROUP, INC.	4

Blue Arc EV Progress Update

Product

DealerServiceand Production

Completed successful customer field test with solid vehicle performance and positive customer feedback

Increase in production battery quality issues from key supplier delayed customer deliveries to 2024

Charlotte facility improvements completed;

Production readiness on track

Expanded geographic reach by partnering with Rush Enterprises to sell and service Blue Arc EVs

Rush operates largest commercial vehicle dealer

network in North America

Remain confident in Blue Arc EV program despite recent supplier development

© 2023 THE SHYFT GROUP, INC.	5

Third Quarter 2023 Financial Review and 2023 Outlook

© 2023 THE SHYFT GROUP, INC.

Shyft Financial Summary - 3Q23

Reported Financials		Adjusted Financials
($ million, except EPS)		($ million, except EPS)

$286.1		Sales
				$201.3
		(30%) Decrease
3Q22	4Q22	1Q23	2Q23	3Q23

Net Income and EPS

	$17.3
					$4.5
			(74%) Decrease
	3Q22	4Q22	1Q23	2Q23	3Q23
EPS	$0.49				$0.13

Adjusted EBITDA and % of Sales

$27.1
				$11.0
		(59%) Decrease
9.5%				5.5%
3Q22	4Q22	1Q23	2Q23	3Q23

Adjusted Net Income and EPS

	$18.6
					$6.7
			(64%) Decrease
	3Q22	4Q22	1Q23	2Q23	3Q23
Adj EPS	$0.53				$0.19

Challenging operating environment

© 2023 THE SHYFT GROUP, INC.	7

Segment Results Summary - 3Q23

Sales		Adjusted EBITDA and % of Sales
(in millions)		($ in millions)

$184.5
				$124.3
FVS
		(33%) Decrease
3Q22	4Q22	1Q23	2Q23	3Q23
$103.9
				$76.6

SV

(26%) Decrease

3Q22

4Q22

1Q23

2Q23

3Q23

$24.4
				$8.0
13.2%		(67%) Decrease		6.4%
3Q22	4Q22	1Q23	2Q23	3Q23

$15.6				$16.0
		+3% Increase
15.0%				20.9%
3Q22	4Q22	1Q23	2Q23	3Q23

Delivered another quarter of record SV profitability; FVS volumes impacting margin performance

© 2023 THE SHYFT GROUP, INC.	8

Narrowing 2023 Outlook

Full Year Outlook

			FY 2023
$ Millions	FY 2022	Current	Prior
Actuals
Sales	$1,027	$850	- $900	$850	- $950
Adjusted EBITDA	$70.8	$40	- $45	$40	- $60
Net Income	$36.6	$4 - $9	$1 - $16
EPS	$1.03	$0.13 - $0.27	$0.03 - $0.46
Adjusted EPS	$1.25	$0.42	- $0.56	$0.33	- $0.76

Commentary

• Tightening outlook given dynamic market conditions
• Continue to adjust spending and cost structure to respond to current environment
• Generated $45M of operating cash flow YTD; expect further working capital reduction in 4Q
• Additional Assumptions
• • Capex ~$30M driven by Blue Arc production
  • Share Count ~35M shares

Difficult operating environment impacting near-term outlook

© 2023 THE SHYFT GROUP, INC.	9

Disciplined Capital Allocation Strategy

Cash and Net Leverage Ratio		3Q23 Highlights

$40				3.5x
$35				3.0x
$30				2.5x
$25				2.0x
$20
$15				1.5x
$10				1.0x
$5				0.5x
$0				0.0x
2019	2020	2021	2022	3Q23

Cash ($M)		Net Leverage Ratio

1. Cash Flow Generation
2. • Generated $9.2M of operating cash flow
3. Capital Structure
4. • Net leverage remains low at ~1.1x
5. Organic and Inorganic Growth
6. • Deployed $5.2M in capital expenditures
7. Efficient Return of Capital
8. • Repurchased $10.3M of shares
   • Funded $1.7M of dividends

Maintaining low leverage while efficiently deploying capital

© 2023 THE SHYFT GROUP, INC.	10