CHARLOTTE, Mich., Dec. 18 /PRNewswire-FirstCall/ — Spartan Chassis
announced it has reached an agreement with the U.S. government in connection
with an investigation of military contracting in South Carolina. The plea is
expected to be finalized at a hearing in U.S. District Court in South Carolina
on Monday, Dec. 22, 2008. Spartan Chassis, a subsidiary of Spartan Motors,
Inc. (Nasdaq: SPAR), said it will plead guilty to one charge of making a false
statement related to the terms and conditions in a military contract and will
pay a total of $6 million in related fines and penalties. The plea, along
with a civil settlement with the Department of Justice, will provide for a
global resolution to all civil and criminal matters related to the
investigation.
The plea agreement and civil settlement will conclude the investigation
conducted by the U.S. Attorney’s Office in South Carolina into the Company’s
military business involving a former Spartan independent contractor. Spartan
initially reported news of the investigation in January 2008. As a result of
the fine, Spartan Motors will record a $6.0 million one-time charge in its
fourth quarter 2008 results, reducing its net earnings by approximately $0.17
per share.
As part of its response to the investigation, Spartan conducted an
extensive internal investigation, and undertook a comprehensive review of its
compliance program with the assistance of outside counsel. This review
resulted in, among other things, a revision of the Company’s Business Code of
Conduct and Compliance, as well as the naming of Chief Financial Officer James
Knapp as Spartan’s Chief Compliance Officer. In addition, Spartan hired
Thomas Kivell as Vice President and General Counsel. He is responsible for
Spartan’s legal and compliance activities, including managing the legal
process for contracting with the U.S. military. Further, Spartan implemented
an extensive compliance training program for all associates and instituted new
internal procedures to ensure adherence to the unique and complex rules and
requirements of government contracting.
“We cooperated fully with the government’s investigation and have taken a
number of proactive steps to ensure both that Spartan has an effective
compliance program in place and that everyone in our organization understands
and appreciates the military’s stringent contracting and reporting
requirements,” said John Sztykiel, president and CEO of Spartan Motors.
“Though clearly a painful lesson, we are looking forward to putting this
incident behind us. We are fully focused on our future in the military market
and expect to remain a supplier in good standing with all our customers.”
About Spartan Chassis
Spartan Chassis, a subsidiary of Spartan Motors, Inc. (Nasdaq: SPAR), is a
leading developer and manufacturer of custom chassis for recreational
vehicles, fire trucks, defense and specialty vehicles. Spartan Motors
(theshyftgroup.com) which also manufactures emergency rescue vehicles
under the brand names of Crimson Fire, Crimson Fire Aerials and Road Rescue,
reported sales of $681.9 million in 2007 and is focused on becoming the
premier manufacturer of specialty vehicles and chassis in North America.
This release contains forward-looking statements, including, without
limitation, statements concerning our business, future plans and objectives
and the performance of our products. Forward looking statements are
identifiable by words such as “believe,” “anticipate,” “will,” “sustain,” and
“continue.” These forward-looking statements involve certain risks and
uncertainties that ultimately may not prove to be accurate. Actual results
and future events could differ materially from those anticipated in such
statements. Technical complications may arise that could prevent the prompt
implementation of the plans outlined above. The company cautions that these
forward-looking statements are further qualified by other factors including,
but not limited to, those set forth in the company’s Annual Report on Form 10-
K filing and other filings with the United States Securities and Exchange
Commission (available at www.sec.gov). Government contracts and subcontracts
typically involve long payment and purchase cycles, competitive bidding,
qualification requirements, delays or changes in funding, extensive
specification development and changes, price negotiations and milestone
requirements. An announced award of a governmental contract is not equivalent
to a finalized executed contract and does not assure that orders will be
issued and filled. Government agencies also often retain some portion of fees
payable upon completion of a project and collection of contract fees may be
delayed for long periods, which can negatively impact both prime contractors
and subcontractors. The company undertakes no obligation to publicly update
or revise any statements in this release, whether as a result of new
information, future events or otherwise, except as required by law.
SOURCE Spartan Chassis
-0- 12/18/2008
/CONTACT: Jeff Lambert of Lambert, Edwards & Associates, +1-616-233-0500
[email protected]
/Web site: https://theshyftgroup.com
(SPAR)