- Net sales of $264.1 million; Increased 11.2% compared to fourth quarter
2007 - Quarterly earnings of $0.45 per diluted share; Increased 80% compared to
fourth quarter 2007 - Consolidated backlog of $237.3 million; Decreased 29.9% compared to
fourth quarter 2007 - Return on invested capital of 42.6%; Increased 55.5% compared to fourth
quarter 2007 - Gross margin of 15.4%; Increased 21.3% compared to fourth quarter 2007
CHARLOTTE, Mich., April 24 /PRNewswire-FirstCall/ — Spartan Motors, Inc.
(Nasdaq: SPAR) reported its best quarter in company history with a 84.8
percent year-over-year increase in revenues and a 105.1 percent year-over-year
increase in net earnings.
First Quarter Results
Spartan reported net earnings of $14.8 million, or $0.45 per diluted
share, on net sales of $264.1 million in the first quarter ended March 31,
2008, compared with net earnings of $7.2 million, or $0.22 per diluted share,
on net sales of $142.9 million in same quarter of 2007.
“The first quarter was an illustration of our flexible manufacturing
model, which enabled us to take advantage of our multiple market strategy,”
said John Sztykiel, president and CEO of Spartan Motors. “As we experienced
lower demand for motorhome chassis, we emphasized our operational focus on
products for our military and emergency-rescue customers. We rescaled our
motorhome chassis operations to accommodate the expected decrease in industry
demand. The result was increased sales and improved efficiencies.”
Spartan Motors’ consolidated backlog decreased 5.1 percent year-over-year
to approximately $237.3 million as of March 31, 2008. Spartan Motors
anticipates fulfilling its current backlog orders by January 2009. The
current backlog does not include the $45 million order from General Dynamics
Land Systems and Force Protection announced in April 2008.
Spartan reported gross margin of 15.4 percent in the first quarter of
2008, a decrease compared with gross margin of 17.3 percent in the same period
in 2007, but a 21.3 percent improvement over gross margin of 12.7 percent for
the 2007 fourth quarter. Spartan attributed the year-over-year decrease in
gross margin to product mix and volume pricing pressures from its military
customers. Spartan reported the increase in gross margin compared to the 2007
fourth quarter was due to improved operational efficiencies.
Spartan Chassis
Sales at Spartan Chassis, the company’s largest subsidiary and operating
unit, increased 91.6 percent year-over year to $245.3 million for the 2008
first quarter. Sales from Spartan Chassis were 92.9 percent of Spartan
Motors’ total consolidated sales in the 2008 first quarter. First quarter net
earnings at Spartan Chassis improved 99.1 percent year-over-year, and the
unit’s backlog as of March 31, 2008 increased 6.9 percent year-over-year.
Spartan’s chassis sales to the Class A diesel motorhome market decreased
32.1 percent year-over-year in the 2008 first quarter, a favorable comparison
to the 33.3 percent year-over-year decrease in industry wholesale shipments
for the first two months of 2008, the latest data available from the
Recreational Vehicle Industry Association (RVIA). Spartan’s backlog for RV
chassis decreased 53.6 percent year-over-year to $17.5 million as of March 31,
2008.
Sales of fire truck chassis decreased 2.9 percent in the first quarter of
2008 compared to the same period of last year. Backlog for fire truck chassis
at the end of the 2008 first quarter was $70.7 million, a 16.2 percent
decrease compared to the 2007 first quarter. Compared to the fourth quarter
2007, backlog for fire truck chassis increased 17.1 percent as Spartan’s OEM
customers improved production in response to better competitive conditions.
Other product sales, including specialty chassis for MRAP military
vehicles, and Spartan Chassis’ growing service, parts and accessories (SPA)
business, increased 330.2 percent year-over-year in the first quarter of 2007.
Backlog for other products increased 86.5 percent year-over-year to $99.2
million as of March 31, 2008.
Emergency Vehicle Team (EVTeam)
Spartan’s EVTeam operating unit, consisting of its Crimson Fire, Crimson
Fire Aerials and Road Rescue subsidiaries, reported a 13.3 percent
year-over-year increase in sales for the 2008 first quarter. Though the unit
posted a net loss for the quarter, the EVTeam reported a 39.6 percent
improvement in segment bottom-line compared to the first quarter of 2007, and
a 75.5 percent improvement compared to the fourth quarter of 2007.
Financial Position
Spartan reported an operating cash flow decrease in the 2008 first quarter
of $26.6 million compared to a decrease of $6.6 million in the same quarter of
2007, driven largely by increased working capital needs required by the 84.8
percent year-over-year increase in sales in the 2008 first quarter.
On a consolidated basis, Spartan posted a return on invested capital
(ROIC) of 42.6 percent in the first quarter of 2008, compared to ROIC of 25.7
percent for the same quarter in 2007. Spartan defines return on invested
capital as operating income less taxes, on an annualized basis, divided by
total shareholders’ equity.
The company ended the quarter with $84.6 million in long-term debt, which
includes financing for Spartan Chassis’ new facilities, as well as growth in
working capital to support the sales increase. Spartan reported $5.3 million
in cash and cash equivalents at the end of the 2008 first quarter.
Future Outlook
“We believe our improved production efficiencies, along with our strong
consolidated backlog, will help generate significant cash flow in the second
half of 2008, which will be utilized to grow the business and reduce debt,”
said Sztykiel. “Based on key indicators such as increased emergency-rescue
orders in the first quarter, a slight improvement in motorhome chassis orders
in March, and the recent new orders from two of our military customers, we are
optimistic about 2008, yet we remain mindful of the difficult economic
conditions affecting one of our core markets.
“Looking ahead to the future, we remain a strategic supplier to the
hardened vehicle market for the U.S. and allied foreign militaries for MRAP
and similar programs. We are promoting six new products in 2008 that will
drive sales starting in 2009. At Spartan Chassis, we are entering the
commercial part of the fire truck chassis and the First Response All Call
(FRAC) market through the Furion chassis. We are also adding more body up-fit
work to our motorhome chassis.
“At Crimson Fire, we are promoting the Boomer, entering the Government
Services Administration/Wildfire (GSA) market and showing a FRAC product
developed jointly with Road Rescue. At Road Rescue, we are adding a new
handicap accessible transport ambulance in addition to the joint FRAC product
with Crimson Fire. Between these new market opportunities and our growing
service, parts and accessories business, we like our prospects for 2009 and
beyond.”
Conference Call & Webcast
Spartan Motors will host a conference call for analysts and portfolio
managers at 10 a.m. ET today to discuss these results and current business
trends. To listen to a live webcast of the call, please visit
theshyftgroup.com , click on “Shareholders,” and then on “Webcasts.”
About Spartan Motors
Spartan Motors, Inc. (theshyftgroup.com ) designs, engineers and
manufactures custom chassis and vehicles for the recreational vehicle, fire
truck, ambulance, emergency-rescue and specialty vehicle markets. The
Company’s brand names — Spartan(TM), Crimson Fire(TM), Crimson Fire
Aerials(TM), and Road Rescue(TM) — are known for quality, value, service and
being the first to market with innovative products. The Company employs
approximately 1,300 at facilities in Michigan, Pennsylvania, South Carolina,
and South Dakota. Spartan 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 http://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.
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Three Months Ended March 31, 2008 and 2007
March 31, 2008 March 31, 2007
$-000- % $-000- %
Sales 264,095 142,882
Cost of Products Sold 223,465 118,190
Gross Profit 40,630 15.4 24,692 17.3
Operating Expenses:
Research and Development 4,688 1.8 3,790 2.7
Selling, General and
Administrative 12,540 4.7 9,482 6.6
Total Operating Expenses 17,228 6.5 13,272 9.3
Operating Income 23,402 8.9 11,420 8.0
Other Income (Expense):
Interest Expense (732) (0.3) (246) (0.2)
Interest and Other Income 93 0.0 137 0.1
Total Other Income (Expense) (639) (0.3) (109) (0.1)
Earnings before Taxes on Income 22,763 8.6 11,311 7.9
Taxes on Income 7,982 3.0 4,104 2.9
Net Earnings 14,781 5.6 7,207 5.0
Basic Net Earnings per Share 0.46 0.23
Diluted Net Earnings per Share 0.45 0.22
Basic Weighted Average Common
Shares Outstanding 31,954 31,655
Diluted Weighted Average Common
Shares Outstanding 32,512 32,610
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, 2008 December 31, 2007
$-000- $-000-
ASSETS
Current assets:
Cash and cash equivalents $5,298 $13,527
Accounts receivable, net 171,708 132,907
Inventories 95,461 103,076
Deferred income tax assets 6,925 6,925
Other current assets 3,461 1,978
Total current assets 282,853 258,413
Property, plant and equipment, net 59,292 56,673
Goodwill 2,457 2,457
Deferred income tax assets 775 775
Other assets 261 346
Total assets $345,638 $318,664
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $71,790 $90,769
Accrued warranty 11,536 10,824
Accrued compensation and related taxes 8,748 10,431
Accrued vacation 1,951 1,758
Accrued customer rebates 1,994 1,963
Deposits from customers 6,163 5,540
Taxes on income 8,361 551
Other current liabilities and
accrued expenses 4,163 3,367
Current portion of long-term debt 523 522
Total current liabilities 115,229 125,725
Other non-current liabilities 1,025 1,025
Long-term debt, less current portion 84,564 62,695
Shareholders' equity:
Common stock 324 324
Additional paid in capital 63,469 62,649
Retained earnings 81,027 66,246
Total shareholders' equity 144,820 129,219
Total liabilities and shareholders' equity $345,638 $318,664
Spartan Motors, Inc. and Subsidiaries
Sales and Other Financial Information by
Business Segment
Quarter Ended March 31, 2008
Three Months Ended March 31, 2008 (amounts in thousands)
Business Segments
Chassis EVTeam Other Consolidated
Motorhome Chassis Sales 38,145 38,145
Fire Truck Chassis Sales 29,737 (5,449) 24,288
EVTeam Product Sales 24,252 24,252
Other Product Sales 177,410 177,410
Total Net Sales 245,292 24,252 (5,449) 264,095
Interest Expense (Income) (51) 398 385 732
Depreciation Expense 589 281 457 1,327
Segment Net Earnings
(Loss) 16,644 (436) (1,427) 14,781
Period End Backlog (amounts in thousands)
March 31, June 30, September December March 31,
2007 2007 30, 2007 31, 2007 2008
Motorhome Chassis * 37,679 23,768 26,097 27,312 17,465
Fire Truck Chassis * 84,416 72,097 67,071 60,374 70,720
Other Product * 53,178 131,801 228,803 199,362 99,153
Total Chassis 175,273 227,666 321,971 287,048 187,338
EVTeam Product * 74,843 62,691 61,178 51,316 49,975
Total Backlog 250,116 290,357 383,149 338,364 237,313
* Anticipated time to fill backlog orders; 2 months or less for
motorhome chassis and 4-10 months for fire truck chassis, other product
and EVTeam product
SOURCE Spartan Motors, Inc.
04/24/2008
CONTACT: John Sztykiel, CEO, or Jim KnappCFO, of Spartan Motors, Inc.
+1-517-543-6400; Jeff Lambert or Ryan McGrath[email protected]
of Lambert, Edwards & Associates, Inc., +1-616-233-0500
Web site: https://theshyftgroup.com
(SPAR)