-- Net sales of $89.7 million
-- Total restructuring charges of $0.9 million
-- Net earnings of $0.02 per diluted share ($0.04 excluding restructuring
charges)
-- Gross margin of 17.6 percent of sales vs. 18.1 percent in 3Q08
-- Operating expenses of $14.6 million (a 30.4 percent decline from 3Q08)
-- Ending cash balance of $36.3 million (a 115.3 percent increase over
2Q09)
-- Year-to-date return on invested capital of 9.1 percent
-- Consolidated backlog of $157.5 million
“We are very pleased with our progress in the quarter, and in particular, our ability to maintain margins and continue our history of positive earnings in the face of a significant revenue decline following the conclusion of a large defense contract,” said
Spartan reported net sales of
Spartan reported consolidated gross margin of 17.6 percent of sales in the third quarter of 2009, comparable to 18.1 percent in the same period in 2008. Spartan attributed its continued strong gross margins to improved product mix from increased sales of fire trucks and SPA and lower commodity costs, offset by
Operating expenses for the 2009 third quarter, which include
Excluding restructuring charges, adjusted operating income was 2.4 percent of sales and adjusted earnings were
Spartan reported positive operating cash flow of
On a consolidated basis, Spartan posted a year-to-date return on invested capital (ROIC) of 9.1 percent. Spartan uses ROIC, defined as operating income less taxes, on an annualized basis, divided by total shareholders’ equity, for internal performance benchmarking.
Sztykiel concluded: “As society changes, markets are changing and so are the vehicles they use, which creates opportunities for Spartan to enter and grow in micro-niches, transforming them from commercial to custom. Some of these strategic opportunities are within existing markets with current OEM customers. Others are in new markets, where we can expand organically, such as our recent orders for custom ambulance chassis, or through strategic acquisitions that fit our business model and have immediate positive bottom-line impact. Our improved cost structure is not only allowing us to manage through the current economic challenges, but also facilitates aggressive growth into new and emerging markets in line with our strategic plan.”
Reconciliation of Non-GAAP Financial Measures
This release contains Adjusted Earnings Per Share and Adjusted Operating Income measures, which are both Non-GAAP financial measures. Adjusted Earnings Per Share and Adjusted Operating Income are calculated by excluding from Earnings Per Share and Operating Income items that we believe to be infrequent or not indicative of our operating performance. For the period covered by this release such items consist of expenses associated with restructuring actions taken to adjust our cost structure to the current business climate. We present Adjusted Earnings Per Share and Adjusted Operating Income because we consider them to be important supplemental measures of our performance and believe them to be useful to show ongoing results from operations distinct from items that are infrequent or not indicative of our operating performance.
Adjusted Earnings Per Share and Adjusted Operating Income are not measurements of our financial performance under GAAP and should not be considered as an alternative to Earnings Per Share or Operating Income under GAAP. Adjusted Earnings Per Share and Adjusted Operating Income have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating Adjusted Earnings Per Share and Adjusted Operating Income, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted Earnings Per Share and Adjusted Operating Income should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results and using Adjusted Earnings Per Share and Adjusted Operating Income only as a supplement.
The following table reconciles Adjusted Earnings Per Share to Earnings Per Share and Adjusted Operating Income to Operating Income for the periods indicated.
Financial Summary (Non-GAAP)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Operating Income (000s) $1,200 $22,048 $18,711 $61,570
Add back: Restructuring
Charges 909 - 957 -
--- --- --- ---
Adjusted Operating
Income 2,109 22,048 19,668 61,570
===== ====== ====== ======
Earnings per Share -
Diluted $0.02 $0.45 $0.37 $1.21
Add Back: Restructuring
Charges 0.02 - 0.02 -
---- --- ---- ---
Adjusted Earnings per
Share - Diluted $0.04 $0.45 $0.39 $1.21
===== ===== ===== =====
Conference Call, Webcast and Roadcast
Spartan also will update the financial information on its Roadcast “digital roadshow” for investors. To launch the Spartan Motors Roadcast, please visit theshyftgroup.com on the web and look for the “Virtual Road Show” link on the right side of the page.
About
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. For example, we may encounter unforeseen difficulties and challenges in entering new markets or in pursuing strategic acquisitions. In addition, technical and other complications may arise that could prevent the timely implementation of our plans or that may impact the expected outcome of those plans. As a result, actual results and future events could differ materially from those anticipated in such statements. 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
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Three Months Ended September 30, 2009 and 2008
September 30, 2009 September 30, 2008
------------------ ------------------
(Unaudited) (Unaudited)
----------- -----------
$-000- % $-000- %
--------------- ---------------
Sales 89,704 237,461
Cost of Products Sold 73,716 194,496
Restructuring Charges 223
---
Gross Profit 15,765 17.6 42,965 18.1
------ ---- ------ ----
Operating Expenses:
Research and Development 4,136 4.6 5,216 2.2
Selling, General and
Administrative 9,743 10.9 15,701 6.6
Restructuring Charges 686 0.8
Total Operating Expenses 14,565 16.3 20,917 8.8
Operating Income 1,200 1.3 22,048 9.3
----- --- ------ ---
Other Income (Expense):
Interest Expense (329) (0.4) (642) (0.3)
Interest and Other Income 266 0.4 331 0.2
--- --- --- ---
Total Other Income (Expense) (63) 0.0 (311) (0.1)
Earnings before Taxes on
Income 1,137 1.3 21,737 9.2
----- --- ------ ---
Taxes on Income 388 0.5 7,081 3.0
Net Earnings 749 0.8 14,656 6.2
=== === ====== ===
Basic Net Earnings per Share 0.02 0.45
==== ====
Diluted Net Earnings per
Share 0.02 0.45
==== ====
Basic Weighted Average
Common Shares Outstanding 32,914 32,710
Diluted Weighted Average
Common Shares Outstanding 33,126 32,837
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Nine Months Ended September 30, 2009 and 2008
September 30, 2009 September 30, 2008
------------------ ------------------
(Unaudited) (Unaudited)
----------- -----------
$-000- % $-000- %
--------------- ---------------
Sales 329,471 698,076
Cost of Products Sold 262,121 580,733
Restructuring Charges 265
---
Gross Profit 67,085 20.4 117,343 16.8
------ ---- ------- ----
Operating Expenses:
Research and Development 13,241 4.0 14,646 2.1
Selling, General and
Administrative 34,441 10.5 41,127 5.9
Restructuring Charges 692 0.2
Total Operating Expenses 48,374 14.7 55,773 8.0
Operating Income 18,711 5.7 61,570 8.8
------ --- ------ ---
Other Income (Expense):
Interest Expense (984) (0.3) (1,811) (0.3)
Interest and Other Income 722 0.2 623 0.1
--- --- --- ---
Total Other Income (Expense) (262) (0.1) (1,188) (0.2)
Earnings before Taxes on
Income 18,449 5.6 60,382 8.6
------ --- ------ ---
Taxes on Income 6,264 1.9 20,530 2.9
Net Earnings 12,185 3.7 39,852 5.7
====== === ====== ===
Basic Net Earnings per Share 0.37 1.22
==== ====
Diluted Net Earnings per
Share 0.37 1.21
==== ====
Basic Weighted Average
Common Shares Outstanding 32,678 32,559
Diluted Weighted Average
Common Shares Outstanding 32,892 32,866
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 2009 December 31, 2008
------------- ------------
(Unaudited) (Unaudited)
----------- -----------
$-000- $-000-
------ ------
ASSETS
Current assets:
Cash and cash equivalents $36,254 $13,741
Accounts receivable, net 48,172 75,935
Inventories 83,879 86,648
Deferred income tax assets 7,076 7,076
Taxes receivable 1,089
Deposits on engines 4,457 5,457
Other current assets 2,225 2,606
Total current assets 183,152 191,463
Property, plant and equipment, net 65,815 66,786
Goodwill 2,457 2,457
Deferred income tax assets 241 241
Other assets 999 193
--- ---
Total assets $252,664 $261,140
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $17,326 $21,776
Accrued warranty 4,890 8,352
Accrued compensation and
related taxes 5,144 12,136
Accrued vacation 1,957 1,904
Accrued customer rebates 1,583 1,498
Deposits from customers 6,763 9,922
Taxes on income 1,972
Other current liabilities
and accrued expenses 4,677 4,584
Current portion of long-term debt 11,513 10,640
Total current liabilities 53,853 72,784
Other non-current liabilities 1,775 1,157
Long-term debt, less current portion 15,172 16,556
Shareholders' equity:
Common stock 329 326
Additional paid in capital 66,387 64,606
Retained earnings 115,148 105,711
Total shareholders' equity 181,864 170,643
Total liabilities and
shareholders' equity $252,664 $261,140
Spartan Motors, Inc. and Subsidiaries
Sales and Other Financial Information by Business Segment
Three and Nine Months Ended September 30, 2009
Unaudited
Three Months Ended September 30, 2009 (amounts in thousands of dollars)
----------------------------------------------------------------------
Business Segments
-----------------
Chassis EVTeam Other Consolidated
------- ------ ----- ------------
Fire Truck Chassis
Sales 40,352 (10,042) 30,310
Motorhome Chassis
Sales 11,071 11,071
EVTeam Product Sales 21,863 21,863
Other Product Sales 26,460 26,460
------ ------ ------ ------
Total Net Sales 77,883 21,863 (10,042) 89,704
====== ====== ======= ======
Interest Expense
(Income) 426 (97) 329
Depreciation Expense 1,068 238 526 1,832
Segment Net Earnings
(Loss) 3,190 (1,201) (1,240) 749
Nine Months Ended September 30, 2009 (amounts in thousands of dollars)
---------------------------------------------------------------------
Business Segments
-----------------
Chassis EVTeam Other Consolidated
------- ------ ----- ------------
Fire Truck Chassis
Sales 112,219 (21,325) 90,894
Motorhome Chassis
Sales 16,574 16,574
EVTeam Product Sales 70,383 70,383
Other Product Sales 151,620 151,620
------- ------- ------- -------
Total Net Sales 280,413 70,383 (21,325) 329,471
======= ====== ======= =======
Interest Expense
(Income) 1,320 (336) 984
Depreciation Expense 3,064 692 1,736 5,492
Segment Net Earnings
(Loss) 16,635 (1,054) (3,396) 12,185
Period End Backlog (amounts in thousands of dollars)
---------------------------------------------------
September December March June September
30, 2008 31, 2008 31, 2009 30, 2009 30, 2009
--------- -------- -------- -------- ---------
Fire Truck
Chassis* 70,815 73,473 98,025 84,840 82,386
Motorhome
Chassis* 9,069 5,552 4,365 6,743 9,589
Other Product* 46,038 8,500 55,827 23,030 12,939
------ ----- ------ ------ ------
Total
Chassis 125,922 87,525 158,217 114,613 104,914
EVTeam
Product* 73,056 96,383 83,344 72,352 72,615
Intercompany
Eliminations (15,206) (14,009) (24,050) (26,232) (20,056)
------- ------- ------- ------- -------
Total Backlog 183,772 169,899 217,511 160,733 157,473
======= ======= ======= ======= =======
* Anticipated time to fill backlog orders; 2 months or less for motorhome
chassis and 8 months or less for fire truck chassis, other product and
EVTeam product. Service, parts and accessories were included in the
backlog beginning in March 31, 2009 .
SOURCE
John Sztykiel, CEO, or Joe Nowicki, CFO, Spartan Motors, Inc., +1-517-543-6400; Jeff Lambert or Ryan McGrath, Lambert, Edwards & Associates, +1-616-233-0500, [email protected]