Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - SHYFT GROUP, INC. | ex_171092.htm |
| 8-K - FORM 8-K - SHYFT GROUP, INC. | spar20200203_8k.htm |
Exhibit 99.2
Unaudited Pro Forma Condensed Consolidated Financial Statements
On January 31, 2020, Spartan Motors, Inc. (the “Company”) entered into an Asset Purchase Agreement with Spartan Motors USA, Inc., a wholly-owned subsidiary of the Company; REV Group, Inc. (“REV”); and Spartan Fire LLC, a wholly-owned subsidiary of REV (the “Buyer”), pursuant to which the Company agreed to sell substantially all of the assets and liabilities comprising the Emergency Response Vehicles business (the “ERV business”) for approximately $55 million in cash, subject to a net working capital adjustment. The ERV business consists of the design, engineering, manufacturing, marketing, and sale of fire truck apparatus and fire truck cab chassis, including through the sale of aftermarkets parts. Pursuant to the Asset Purchase Agreement, the Buyer also agreed to assume certain liabilities of the ERV business.
The following unaudited pro forma condensed consolidated financial statements (“Unaudited Pro Forma Statements”) and explanatory notes are based on the Company’s historical consolidated financial statements adjusted to give effect to the sale of the ERV business. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2019, the year ended December 31, 2018, 2017, and 2016 have been prepared with the assumption that the sale of the ERV business occurred as of January 1, 2016. The unaudited pro forma condensed balance sheet as of September 30, 2019 has been prepared with the assumption that the sale of the ERV business was completed as of the balance sheet date. The unaudited pro forma statements have been prepared by the Company based on assumptions deemed appropriate by the Company’s management. An explanation of pro forma adjustments is set forth under the notes hereto.
The Unaudited Pro Forma Statements are presented for illustrative purposes only and do not necessarily reflect what the Company’s financial condition or results of operations would have been had the sale of the ERV business occurred on the date indicated. Additionally, the Unaudited Pro Forma Statements do not purport to project the future financial condition or results of operations of the Company.
The Unaudited Pro Forma Statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as well as the Company’s unaudited condensed consolidated financial statements and notes thereto included in the Company’s Quarterly report on Form 10-Q for the period ended September 30, 2019.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2019
(amounts in thousands, except per share data)
|
Historical Spartan Motors, Inc. |
Disposition of Business |
A |
Other Adjustments |
Pro Forma Spartan Motors, Inc. |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ | 15,019 | $ | - | $ | - | $ | 15,019 | ||||||||
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Accounts receivable |
112,455 | 32,082 | - | 80,373 | ||||||||||||
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Contract assets |
49,043 | 36,611 | - | 12,432 | ||||||||||||
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Inventories |
87,936 | 36,451 | - | 51,485 | ||||||||||||
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Other receivables – chassis pool agreements |
16,975 | - | - | 16,975 | ||||||||||||
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Other current assets |
6,247 | 1,955 | - | 4,292 | ||||||||||||
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Total current assets |
287,675 | 107,099 | - | 180,576 | ||||||||||||
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Property and equipment, net |
62,189 | 24,914 | - | 37,275 | ||||||||||||
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Right of use assets – operating leases |
37,110 | 6,311 | - | 30,799 | ||||||||||||
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Goodwill |
60,333 | 11,456 | - | 48,877 | ||||||||||||
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Intangible assets, net |
55,149 | 3,488 | - | 51,661 | ||||||||||||
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Other assets |
2,693 | 58 | - | 2,635 | ||||||||||||
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Net deferred tax asset |
7,463 | - | - | 7,463 | ||||||||||||
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TOTAL ASSETS |
$ | 512,612 | $ | 153,326 | $ | - | 359,286 | |||||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable |
$ | 83,723 | $ | 13,673 | $ | - | $ | 70,050 | ||||||||
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Accrued warranty |
18,084 | 13,172 | - | 4,912 | ||||||||||||
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Accrued compensation and related taxes |
17,362 | 4,928 | - | 12,434 | ||||||||||||
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Deposits from customers |
11,369 | 9,632 | - | 1,737 | ||||||||||||
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Operating lease liability |
5,133 | 3 | - | 5,130 | ||||||||||||
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Other current liabilities and accrued expenses |
14,849 | 5,916 | - | 8,933 | ||||||||||||
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Short-term debt – chassis pool agreements |
16,975 | - | - | 16,975 | ||||||||||||
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Total current liabilities |
167,495 | 47,324 | - | 120,171 | ||||||||||||
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Other non-current liabilities |
4,376 | 1,121 | - | 3,255 | ||||||||||||
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Long-term operating lease liability |
32,171 | 5,686 | - | 26,485 | ||||||||||||
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Long-term debt, less current portion |
108,944 | - | (51,396 | ) | B | 57,548 | ||||||||||
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Total liabilities |
312,986 | 54,131 | (51,396 | ) | 207,459 | |||||||||||
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Total shareholders’ equity |
199,626 | 99,195 | 51,396 | B | 151,827 | |||||||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | 512,612 | $ | 153,326 | $ | - | $ | 359,286 | ||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2019
(amounts in thousands, except per share data)
|
Historical Spartan Motors, Inc. |
Disposition of Business |
A |
Other Adjustments |
Pro Forma Spartan Motors, Inc. |
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Sales |
$ | 770,850 | $ | 194,261 | $ | - | $ | 576,589 | ||||||||
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Cost of products sold |
677,216 | 179,378 | - | 497,838 | ||||||||||||
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Restructuring charges |
60 | 53 | - | 7 | ||||||||||||
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Gross profit |
93,574 | 14,830 | - | 78,744 | ||||||||||||
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Selling, general and administrative |
74,705 | 21,186 | - | 53,519 | ||||||||||||
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Restructuring charges |
259 | 229 | - | 30 | ||||||||||||
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Total operating expenses |
74,964 | 21,415 | - | 53,549 | ||||||||||||
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Operating income (loss) |
18,610 | (6,585 | ) | - | 25,195 | |||||||||||
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Interest and other income |
1,132 | 1,014 | 1,277 | C | 1,395 | |||||||||||
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Income (loss) before income taxes |
19,742 | (5,571 | ) | 1,277 | 26,590 | |||||||||||
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Taxes |
4,499 | (1,511 | ) | 317 | D | 6,327 | ||||||||||
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Net earnings (loss) |
15,243 | (4,060 | ) | 960 | 20,263 | |||||||||||
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Less: net loss attributable to non-controlling interest |
(14 | ) | - | - | (14 | ) | ||||||||||
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Net earnings attributable to Spartan Motors, Inc. |
$ | 15,257 | $ | (4,060 | ) | $ | 960 | $ | 20,277 | |||||||
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Basic net earnings per share |
$ | 0.43 | $ | 0.57 | ||||||||||||
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Diluted net earnings per share |
$ | 0.43 | $ | 0.57 | ||||||||||||
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Basic weighted average common shares outstanding |
35,311 | 35,311 | ||||||||||||||
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Diluted weighted average common shares outstanding |
35,355 | 35,355 | ||||||||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2018
(amounts in thousands, except per share data)
|
Historical Spartan Motors, Inc. |
Disposition of Business |
A |
Other Adjustments |
Pro Forma Spartan Motors, Inc. |
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Sales |
$ | 816,164 | $ | 245,637 | $ | - | $ | 570,527 | ||||||||
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Cost of products sold |
717,607 | 220,237 | - | 497,370 | ||||||||||||
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Restructuring charges |
302 | 289 | - | 13 | ||||||||||||
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Gross profit |
98,255 | 25,111 | - | 73,144 | ||||||||||||
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Selling, general and administrative |
80,713 | 27,374 | - | 53,339 | ||||||||||||
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Restructuring charges |
1,429 | 780 | 649 | |||||||||||||
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Total operating expenses |
82,142 | 28,154 | - | 53,988 | ||||||||||||
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Operating income (loss) |
16,113 | (3,043 | ) | - | 19,156 | |||||||||||
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Interest and other income |
1,160 | 2,228 | 1,702 | C | 634 | |||||||||||
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Income (loss) before income taxes |
17,273 | (815 | ) | 1,702 | 19,790 | |||||||||||
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Taxes |
2,261 | (401 | ) | 417 | D | 3,079 | ||||||||||
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Net earnings (loss) |
15,012 | (414 | ) | 1,285 | 16,711 | |||||||||||
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Less: net loss attributable to non-controlling interest |
- | - | - | - | ||||||||||||
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Net earnings attributable to Spartan Motors, Inc. |
$ | 15,012 | $ | (414 | ) | $ | 1,285 | $ | 16,711 | |||||||
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Basic net earnings per share |
$ | 0.43 | $ | 0.47 | ||||||||||||
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Diluted net earnings per share |
$ | 0.43 | $ | 0.47 | ||||||||||||
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Basic weighted average common shares outstanding |
35,187 | 35,187 | ||||||||||||||
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Diluted weighted average common shares outstanding |
35,187 | 35,187 | ||||||||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2017
(amounts in thousands, except per share data)
|
Historical Spartan Motors, Inc. |
Disposition of Business |
A |
Other Adjustments |
Pro Forma Spartan Motors, Inc. |
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|
Sales |
$ | 707,098 | $ | 302,850 | $ | - | $ | 404,248 | ||||||||
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Cost of products sold |
617,655 | 276,479 | - | 341,176 | ||||||||||||
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Restructuring charges |
208 | 88 | - | 120 | ||||||||||||
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Gross profit |
89,235 | 26,283 | - | 62,952 | ||||||||||||
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Selling, general and administrative |
72,020 | 27,532 | - | 44,488 | ||||||||||||
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Restructuring charges |
1,044 | 366 | - | 678 | ||||||||||||
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Total operating expenses |
73,064 | 27,898 | - | 45,166 | ||||||||||||
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Operating income (loss) |
16,171 | (1,615 | ) | - | 17,786 | |||||||||||
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Interest and other income |
(147 | ) | 115 | 1,702 | C | 1,440 | ||||||||||
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Income (loss) before income taxes |
16,024 | (1,500 | ) | 1,702 | 19,226 | |||||||||||
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Taxes |
90 | (4,501 | ) | 648 | D | 5,239 | ||||||||||
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Net earnings |
15,934 | 3,001 | 1,054 | 13,987 | ||||||||||||
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Less: net loss attributable to non-controlling interest |
(1 | ) | (1 | ) | - | - | ||||||||||
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Net earnings attributable to Spartan Motors, Inc. |
$ | 15,935 | 3,002 | $ | 1,054 | $ | 13,987 | |||||||||
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Basic net earnings per share |
$ | 0.46 | $ | 0.40 | ||||||||||||
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Diluted net earnings per share |
$ | 0.46 | $ | 0.40 | ||||||||||||
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Basic weighted average common shares outstanding |
34,949 | 34,949 | ||||||||||||||
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Diluted weighted average common shares outstanding |
34.949 | 34,949 | ||||||||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2016
(amounts in thousands, except per share data)
|
Historical Spartan Motors, Inc. |
Disposition of Business |
A |
Other Adjustments |
Pro Forma Spartan Motors, Inc. |
||||||||||||
|
Sales |
$ | 590,777 | $ | 182,982 | $ | - | $ | 407,795 | ||||||||
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Cost of products sold |
518,113 | 174,217 | - | 343,896 | ||||||||||||
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Restructuring charges |
136 | 136 | - | - | ||||||||||||
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Gross profit |
72,528 | 8,629 | - | 63,899 | ||||||||||||
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Selling, general and administrative |
62,944 | 21,331 | - | 41,613 | ||||||||||||
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Restructuring charges |
959 | 959 | - | - | ||||||||||||
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Total operating expenses |
63,903 | 22,290 | - | 41,613 | ||||||||||||
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Operating income (loss) |
8,625 | (13,661 | ) | - | 22,286 | |||||||||||
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Interest and other income |
78 | (141 | ) | 1,702 | C | 1,921 | ||||||||||
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Income (loss) before income taxes |
8,703 | (13,802 | ) | 1,702 | 24,207 | |||||||||||
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Taxes |
100 | (8,516 | ) | 652 | D | 9,268 | ||||||||||
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Net earnings (loss) |
8,603 | (5,286 | ) | 1,050 | 14,939 | |||||||||||
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Less: net loss attributable to non-controlling interest |
(7 | ) | (7 | ) | - | - | ||||||||||
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Net earnings attributable to Spartan Motors, Inc. |
$ | 8,610 | $ | (5,279 | ) | $ | 1,050 | $ | 14,939 | |||||||
|
Basic net earnings per share |
$ | 0.25 | $ | 0.43 | ||||||||||||
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Diluted net earnings per share |
$ | 0.25 | $ | 0.43 | ||||||||||||
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Basic weighted average common shares outstanding |
34,405 | 34,405 | ||||||||||||||
|
Diluted weighted average common shares outstanding |
34.405 | 34,405 | ||||||||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note 1 Description of the Transaction and Basis of Presentation
On February 1, 2020, the Company completed the sale of substantially all of the assets and liabilities of the ERV business pursuant to the terms and conditions set forth in the Asset Purchase Agreement and received $55 million in cash, subject to a net working capital adjustment. Pursuant to the Asset Purchase Agreement, the Buyer also agreed to assume certain liabilities of the ERV business.
Note 2 Pro Forma Adjustments
The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Statements of Operations, including certain adjustments that were made to the historical presentation of the Company as follows:
|
A |
Adjustments to reflect the disposition of the ERV business. |
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B |
Sale proceeds, net of estimated transaction related expenses, assumed to be used to pay down the long-term debt. |
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C |
Interest expense resulting from the pay down of the long-term debt. |
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D |
Income tax effect associated with the Company’s sale of ERV business. In 2016 and 2017, the tax expense allocated to the disposition reflects the effect of the Company's valuation allowance as a result of the related losses. The change in valuation allowance in 2017 has been allocated based on the amount of the allowance related to each respective business. The rate change resulting from the enactment of the Tax Cuts and Jobs Act in 2017 was allocated according to respective deferred tax assets and liabilities. |