CHARLOTTE, Mich., Feb 19, 2009 /PRNewswire-FirstCall via COMTEX/ — Spartan Motors, Inc.
(Nasdaq: SPAR) reported its best year in company history in 2008, marked by a
23.8 percent year-over-year increase in revenues and a 74.3 percent increase
in net earnings.
For the fourth quarter ended Dec. 31, 2008, Spartan reported:
- Net earnings of $0.09 per diluted share ($0.26 excluding one-time
charges) - Net sales of $146.3 million
- Gross margin of 21.1%
- Return on invested capital of 7.2%
- Consolidated backlog of $169.9 million
Fourth Quarter & Year-End Results
Spartan reported fourth quarter net earnings of $2.9 million, or $0.09 per
diluted share, on net sales of $146.3 million, compared with net earnings of
$8.2 million, or $0.25 per diluted share, on net sales of $237.6 million in
the same quarter of 2007.
Spartan reported consolidated gross margin of 21.1 percent in the fourth
quarter of 2008, a 66.1 percent increase over the same period in 2007 and a
16.6 percent increase over its gross margin in the third quarter of 2008.
Spartan attributed the year-over-year increase in gross margin to higher sales
in its service, parts and accessories business, productivity improvements and
a change in product mix.
The company reported a 51.3 percent increase in selling, general and
administrative (SG&A) costs in the fourth quarter of 2008 compared with the
prior year period, driven primarily by legal expenses and fines related to a
previously reported settlement between Spartan Chassis and the Department of
Justice. This included an expense of $6.0 million, or a net effect of
approximately $0.17 per share, to encompass all fines and penalties.
For the year ended 2008, Spartan’s sales increased 23.8 percent year-over
year to $844.4 million and net earnings grew 74.3 percent year-over-year to
$42.7 million, or $1.32 per diluted share, the highest profits in company
history. Spartan Motors reported consolidated backlog of approximately $169.9
million as of Dec. 31, 2008 and the company anticipates fulfilling its current
backlog orders by October 2009.
“Despite the economic recession and other challenges, we maintained our
focus and created the best performance in the history of the company,” said
John Sztykiel, president and CEO of Spartan Motors. “During the year, we also
scaled our operations to match demand, controlled costs, invested resources
into innovation and product development and ended the year on financially
solid ground. Our diversification across several sectors gives us numerous
opportunities while minimizing risk. Additionally, our business model gives
us the agility to quickly respond to market needs, take advantage of strategic
opportunities when they arise and correctly size our operations to ensure
growth.
“Though our 2009 results are not expected to match our performance in
2008, we are focused on maximizing our opportunities in 2009 and executing our
long-term strategic plan to fuel our growth in 2010 and beyond. As part of
this plan, we expect to introduce new products into specialty vehicle markets
where we do not currently compete. Since our inception in 1975, a large
recession year, periods of recession have been followed by years of growth for
Spartan. Recessions cause society and business to restructure, which in turn
cause vehicles to change. While over the short term we are taking the steps
to manage through the recession, we have demonstrated profitable growth over
the long term.”
Spartan Chassis
Sales at Spartan Chassis, the company’s largest subsidiary and operating
unit, decreased 38.9 percent year-over year to $129.0 million for the current
quarter. Spartan Chassis represented 88.2 percent of Spartan Motors’ total
consolidated sales in the 2008 fourth quarter. Spartan Chassis’ net earnings
declined 65.2 percent year-over-year in the quarter, reflecting the expenses
for penalties and fines.
Spartan’s chassis sales to the Class A diesel motorhome market decreased
86.6 percent year-over-year in the quarter, while backlog for RV chassis
decreased 79.7 percent year-over-year to $5.6 million as of Dec. 31, 2008.
Sales of fire truck chassis in the quarter increased 12.9 percent compared to
the same period in 2007, and backlog for fire truck chassis at the end of the
2008 fourth quarter was $73.5 million, a 21.7 percent year-over-year increase.
Other Products sales, including specialty chassis for mine-resistant and
MRAP military vehicles, and Spartan Chassis’ growing service, parts and
accessories (SPA) business, decreased 31.3 percent year-over-year in the
fourth quarter of 2008, reflecting the completion of several large orders for
military customers. Other Products backlog, which excludes service parts, was
$8.5 million as of Dec. 31, 2008, compared to Other Products backlog of $199.4
million at year-end 2007.
“Sales from SPA continued to grow at a rapid pace during the fourth
quarter,” said Sztykiel. “The majority of this growth in SPA was for mine-
resistant military and MRAP vehicles. However, we are also targeting greater
expansion of SPA into the motorhome and emergency-rescue markets, both of
which are significantly larger than the SPA business for the specialty vehicle
market.”
Emergency Vehicle Team (EVTeam)
Spartan’s EVTeam operating unit, consisting of its Crimson Fire, Crimson
Fire Aerials and Road Rescue subsidiaries, reported a 13.0 percent year-over-
year decline in sales for the 2008 fourth quarter. The EVTeam posted a net
loss of $393,000 for the quarter. The loss was a 77.9 percent improvement
compared to the fourth quarter of 2007, a result of improved operating
efficiencies. The EVTeam’s sales represented 11.8 percent of total company-
wide sales in the 2008 fourth quarter, net of eliminations. For the year
ended 2008, the EVTeam reported a 3.6 percent improvement in sales compared to
2007, and 57.0 percent year-over-year improvement in segment bottom-line.
Backlog for the emergency vehicle team was $82.4 million at the end 2008, a
60.6 percent year-over-year increase compared to $51.3 million at the end of
2007.
Financial Position
Spartan reported positive operating cash flow of $59.0 million in the
current quarter and the company ended the quarter with $13.7 million in cash
and cash equivalents, as well as $16.6 million in long-term debt. As
previously reported, Spartan Motors holds a $50 million line of credit with
J.P. Morgan Chase Bank, which remains fully available to fund future needs.
“We are generating cash and have minimal long-term debt, giving us access
to the capital we need to grow the business,” said Chief Financial Officer Jim
Knapp. “Our financial strength allows us to make the best decisions to
maximize shareholder return, whether it is investing in the business,
repurchasing stock or evaluating strategic acquisitions.”
On a consolidated basis, Spartan posted a return on invested capital
(ROIC) of 7.2 percent in the fourth quarter of 2008, compared to ROIC of 27.4
percent for the same quarter in 2007. For the full year 2008, Spartan
reported ROIC of 25.8 percent compared to 19.8 percent in 2007. Spartan
defines return on invested capital as operating income less taxes, on an
annualized basis, divided by total shareholders’ equity.
Market Outlook
Spartan reported it expects its consolidated 2009 results to be less than
2008 because of market and economic conditions, and a reduction in specialty
vehicle sales, primarily large-scale military contracts, though the potential
for larger orders remains.
“Though we expect a year-over-year decline for specialty vehicle sales in
the first half of 2009, we are currently working closely with our military
customers to develop new lines of mine-resistant vehicles, such as the M-ATV
program for deployment in Afghanistan and other variants for the U.S. and
other militaries,” said Sztykiel. “We do emphasize that we are in the
specialty vehicle business today and expect to be in the future. Our
opportunities exist because of our speed-to-market, manufacturing flexibility,
on-time delivery, product performance and superior service, parts and support,
all of which continue to be our strengths in 2009. We continue to produce
smaller orders of specialized mine-resistant variants for the U.S. military
and other nations, which we see as a bridge to larger opportunities in the
future.
“In addition, emergency-rescue remains Spartan’s largest, most stable
market, and we expect continuous growth based on increased market share and
new product and innovation initiatives. For all our emergency-rescue
products, we expect to see growth in 2009. We have already built a strong
order pipeline for our fire truck chassis and fire trucks in the first half of
the year, due in part to increased demand from changes to industry safety
regulations.”
Sztykiel concluded: “Our focus in motorhomes this year is to position
ourselves for the eventual industry recovery. We expect flat to lower sales
in 2009 for motorhome chassis because of industry conditions. However, retail
sales have severely depleted dealer inventory, giving us the potential for a
significant rebound when the RV industry begins its eventual recovery. Though
difficult to predict, we believe there will be a probable year-over-year
decline in the second half for motorhome chassis sales. In the meantime, we
are continuing new product development and engineering new innovations for
motorhome chassis to gain market share and new OEM customers.”
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
https://theshyftgroup.com , click on “Shareholders,” and then on
“Webcasts.”
About Spartan Motors
Spartan Motors, Inc. ( https://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 1,200 at facilities in Michigan, Pennsylvania, South Carolina
and South Dakota. Spartan reported sales of $844.4 million in 2008 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 Balance Sheets
December 31, 2008 December 31, 2007
$-000- $-000-
ASSETS
Current assets:
Cash and cash equivalents $13,741 $13,527
Accounts receivable, net 75,935 132,907
Inventories 86,648 103,076
Deferred income tax assets 7,076 6,925
Other current assets 8,063 1,978
Total current assets 191,463 258,413
Property, plant and equipment, net 66,786 56,673
Goodwill 2,457 2,457
Deferred income tax assets 241 775
Other assets 193 346
Total assets $261,140 $318,664
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $21,776 $90,769
Accrued warranty 8,352 10,824
Accrued compensation and
related taxes 12,136 10,431
Accrued vacation 1,904 1,758
Accrued customer rebates 1,498 1,963
Deposits from customers 9,922 5,540
Taxes on income 1,972 551
Other current liabilities and
accrued expenses 4,584 3,367
Current portion of long-term debt 10,640 522
Total current liabilities 72,784 125,725
Other non-current liabilities 1,157 1,025
Long-term debt, less current portion 16,556 62,695
Shareholders' equity:
Common stock 326 324
Additional paid in capital 64,606 62,649
Retained earnings 105,711 66,246
Total shareholders' equity 170,643 129,219
Total liabilities and shareholders'
equity $261,140 $318,664
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Three Months Ended December 31, 2008 and 2007
December 31, 2008 December 31, 2007
$-000- % $-000- %
Sales 146,314 237,567
Cost of Products Sold 115,387 207,345
Gross Profit 30,927 21.1 30,222 12.7
Operating Expenses:
Research and Development 4,814 3.3 4,543 1.9
Selling, General and Administrative 18,971 13.0 12,541 5.3
Total Operating Expenses 23,785 16.3 17,084 7.2
Operating Income 7,142 4.9 13,138 5.5
Other Income (Expense):
Interest Expense (251) (0.2) (830) (0.3)
Interest and Other Income 56 (0.0) 205 0.1
Total Other Income (Expense) (195) (0.1) (625) (0.2)
Earnings before Taxes on Income 6,947 4.7 12,513 5.3
Taxes on Income 4,085 2.8 4,301 1.8
Net Earnings 2,862 1.9 8,212 3.5
Basic Net Earnings per Share 0.09 0.26
Diluted Net Earnings per Share 0.09 0.25
Basic Weighted Average Common
Shares Outstanding 32,086 32,070
Diluted Weighted Average Common
Shares Outstanding 32,244 32,780
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Twelve Months Ended December 31, 2008 and 2007
December 31, 2008 December 31, 2007
$-000- % $-000- %
Sales 844,390 681,922
Cost of Products Sold 696,120 585,421
Gross Profit 148,270 17.5 96,501 14.2
Operating Expenses:
Research and Development 19,461 2.3 15,868 2.3
Selling, General and Administrative 60,097 7.1 41,383 6.1
Total Operating Expenses 79,558 9.4 57,251 8.4
Operating Income 68,712 8.1 39,250 5.8
Other Income (Expense):
Interest Expense (2,062) (0.2) (1,748) (0.3)
Interest and Other Income 679 0.1 725 0.1
Total Other Income (Expense) (1,383) (0.2) (1,023) (0.2)
Earnings before Taxes on Income 67,329 8.0 38,227 5.6
Taxes on Income 24,615 2.9 13,723 2.0
Net Earnings 42,714 5.1 24,504 3.6
Basic Net Earnings per Share 1.33 0.77
Diluted Net Earnings per Share 1.32 0.75
Basic Weighted Average Common
Shares Outstanding 32,008 31,935
Diluted Weighted Average Common
Shares Outstanding 32,437 32,833
Spartan Motors, Inc. and Subsidiaries
Sales and Other Financial Information by Business Segment
Three and Twelve Months Ended December 31, 2008
Three Months Ended December 31, 2008 (amounts in thousands of dollars)
Business Segments
Chassis EVTeam Other Consolidated
Motorhome Chassis Sales 6,990 6,990
Fire Truck Chassis Sales 32,613 (6,730) 25,883
EVTeam Product Sales 23,999 23,999
Other Product Sales 89,442 89,442
Total Net Sales 129,045 23,999 (6,730) 146,314
Interest Expense 11 460 (220) 251
Depreciation Expense 888 277 600 1,765
Segment Net Earnings (Loss) 4,518 (393) (1,263) 2,862
Twelve Months Ended December 31, 2008 (amounts in thousands of dollars)
Business Segments
Chassis EVTeam Other Consolidated
Motorhome Chassis Sales 91,141 91,141
Fire Truck Chassis Sales 121,641 (27,619) 94,022
EVTeam Product Sales 92,658 92,658
Other Product Sales 566,569 566,569
Total Net Sales 779,351 92,658 (27,619) 844,390
Interest Expense 27 1,620 415 2,062
Depreciation Expense 2,885 1,147 2,027 6,059
Segment Net Earnings (Loss) 51,365 (2,179) (6,472) 42,714
Period End Backlog (amounts in thousands of dollars)
December 31, March 31, June 30, September 30, December 31,
2007 2008 2008 2008 2008
Motorhome
Chassis* 27,312 17,465 12,533 9,069 5,552
Fire Truck
Chassis* 60,374 70,720 75,931 70,815 73,473
Other Product* 199,362 166,457 188,665 46,038 8,500
Total Chassis 287,048 254,642 277,129 125,922 87,525
EVTeam Product* 51,316 49,975 43,094 57,850 82,374
Total Backlog 338,364 304,617 320,223 183,772 169,899
* Anticipated time to fill backlog orders; 2 months or less for motorhome
chassis and 10 months or less for fire truck chassis, other product and
EVTeam product
SOURCE Spartan Motors, Inc.