– Year-end 2007 net earnings up 45.6 percent
- Fourth quarter 2007 earnings of $0.25 per diluted share, versus $0.10
in 2006 fourth quarter - Backlog of $338.4 million increased over prior year.
- Return on invested capital for fourth quarter 2007 of 27.4 percent
CHARLOTTE, Mich., Feb. 14 /PRNewswire-FirstCall/ — Spartan Motors, Inc.
(Nasdaq: SPAR) reported its best quarter and year-end sales and earnings
results in company history, capping off a record setting year for one of the
leading manufacturers of custom vehicle chassis and emergency-rescue vehicles.
Full Year Results
For the year ended 2007, Spartan reported sales increased 53.1 percent and
net earnings increased 45.6 percent compared to last year. Spartan reported
net earnings of $24.5 million, or $0.75 per diluted share, on net sales of
$681.9 million for the year ended 2007, compared with last year’s net earnings
of $16.8 million, or $0.55 per diluted share, on net sales of $445.4 million.
(All financial information includes adjustments for the company’s 3-for-2
stock splits in June 2007 and Dec. 2006.)
Spartan Motors’ consolidated backlog increased 45.8 percent over the same
time last year to approximately $338.4 million as of Dec. 31, 2007, reflecting
an increase in orders from Spartan’s military customers. Consolidated backlog
declined 11.7 percent compared to levels as of Sept. 30, 2007, reflecting
improvements in production rates which also led to a 219.5 percent increase in
fourth quarter 2007 earnings compared to the third quarter of 2007. Spartan
Motors anticipates filling its current backlog orders by October 2008.
Fourth Quarter 2007 Results
Spartan reported net earnings of $8.2 million, or $0.25 per diluted share,
on net sales of $237.6 million in the fourth quarter ended Dec. 31, 2007,
compared with net earnings of $3.3 million, or $0.10 per diluted share, on net
sales of $123.6 million in the fourth quarter of 2006.
“2007 was a year of rapid sales growth, competitive pricing and investment
in flexible manufacturing capacity,” said John Sztykiel, president and CEO of
Spartan Motors Inc. “Although we had some margin compression as a result,
these strategic investments have helped us secure more orders as reflected in
our current backlog, and positioned us for continued growth.”
Spartan reported gross margin of 12.7 percent in the fourth quarter 2007,
a decrease compared with gross margin of 16.8 percent in the same period in
2006, though an improvement over gross margin of 11.8 percent for the third
quarter of 2007. Spartan attributed the year-over-year decrease in gross
margin to volume pricing pressure, increased bill of materials costs and
product mix. Spartan reported the increase in gross margin compared to the
2007 third quarter was due to improvements in production efficiency and
pricing in the 2007 fourth quarter.
2008 Outlook
“Looking ahead to 2008 we are expecting a year of solid sales growth,
driven in part by our largest ever fourth quarter backlog,” said Sztykiel.
“Our multi-market strategy is a diversified business model where our customers
operate on different business cycles, providing us upside potential and
reducing downside risk.
“We are anticipating a tough market for recreational vehicles, but we are
cautiously optimistic based on the number of models on Spartan chassis, up
from 36 models in the 2006 to 40 models in 2007. While the RV industry had a
tough year in 2007, Spartan grew market share and shipped more units in 2007
compared to 2006.
“Although municipalities continue to manage ever-tightening budgets, our
aging population continues to drive demand for emergency services. Every 20
seconds there is a call for help in the U.S., according to the National Fire
Protection Association. This increasing demand, and the state of some
competitors in the industry, could provide Spartan opportunities to grow sales
as municipal funding is impacted by economic uncertainties.”
Spartan Chassis
Sales for the fourth quarter at Spartan Chassis, the company’s largest
operating unit, increased 85.7 percent year-over year to $211.2 million.
Spartan Chassis was 88.9 percent of Spartan Motors’ total sales. Fourth
quarter net earnings at Spartan Chassis improved 74.2 percent year-over-year,
and the unit’s backlog as of Dec. 31, 2007 increased 76.8 percent year-over-
year.
Spartan’s chassis sales to the Class A diesel motorhome market increased
11.9 percent year-over-year in the 2007 fourth quarter, reflecting the market
share growth within the luxury motorhome market and outpacing flat industry
wholesale shipments reported by the Recreational Vehicle Industry Association
(RVIA) . Backlog for RV chassis decreased slightly year-over-year to $27.3
million as of Dec. 31, 2007.
Sales of fire truck chassis increased 2.6 percent in the fourth quarter of
2007 compared to the same period last year. Backlog for fire truck chassis at
the end of the fourth quarter was $60.4 million, a 28.5 percent decrease
compared with last year. The year-over-year decrease in backlog in the 2007
fourth quarter reflected both industry-wide softness in municipal ordering,
and an improvement in delivery time of product from Spartan to customers.
Other product sales, including specialty vehicle chassis for MRAP military
vehicles, and Spartan Chassis’ growing service, parts and accessories
business, increased 233.9 percent year-over-year in the fourth quarter of
2007. Backlog for other products more than tripled over the same period of
2006 to $199.4 million as of Dec. 31, 2007. Spartan expects to report
additional orders in the near future from its military customers.
Emergency Vehicle Team (EVTeam)
Spartan’s EVTeam operating unit, consisting of its Crimson Fire, Crimson
Fire Aerials and Road Rescue subsidiaries, reported a 67.3 percent year-over-
year increase in sales for the 2007 fourth quarter, though the unit posted a
net loss for the quarter. The EVTeam reported backlog of $51.3 million at the
end of the quarter, a 26.4 percent decrease compared to the unit’s backlog in
the fourth quarter of 2006, reflecting higher production rates as well as the
softening in municipal ordering in the second half of 2007.
“Crimson Fire and Crimson Fire Aerials underperformed compared to the
fourth quarter of 2006, though both are making improvements in efficiency over
where they were in the third quarter of 2007,” Sztykiel said. “While we are
disappointed with the rate of progress at the EVTeam in 2007, we are
cautiously optimistic about their potential in 2008.”
Financial Position
Spartan reported operating cash flow improvement in the fourth quarter of
2007 of $9.1 million compared to the same quarter of 2006, driven largely by
increased income and improvements in the cash conversion cycle.
On a consolidated basis, Spartan posted a return on invested capital
(ROIC) of 27.4 percent in the fourth quarter of 2007, compared to ROIC of 12.3
percent for the same quarter in 2006. For the year ended, Spartan reported a
consolidated ROIC of 19.8 percent in fiscal 2007, compared to ROIC of 15.7
percent for fiscal 2006. (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 $62.7 million in long-term debt, which
includes financing for Spartan Chassis’ new facilities and growth in working
capital to support its increased orders. Spartan reported $13.5 million in
cash and cash equivalents at the end of the fourth quarter of 2007.
Shareholder Value Creation
As reported in early January 2008, Spartan repurchased 250,000 shares of
its common stock in the open market during the fourth quarter of 2007. Spartan
repurchased a total of 300,000 shares in 2007.
In Dec. 2007, Spartan paid a special dividend of $0.03 per share of common
stock along with its regular cash dividend of $0.05 per share, for total
dividend payments of $0.13 per share in fiscal 2007. Adjusted for the stock
splits, Spartan’s total cash dividends increased 8.3 percent compared with
2006. Fiscal 2007 marked the fifth consecutive year the company increased its
total dividend payments to shareholders.
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. 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, December 31,
2007 2006
$-000- $-000-
ASSETS
Current assets:
Cash and cash equivalents $13,527 $13,835
Accounts receivable, net 132,907 62,620
Inventories 103,076 64,173
Deferred income tax assets 6,925 4,567
Deposits on engines 10,900
Other current assets 1,978 1,882
Total current assets 258,413 157,977
Property, plant and equipment, net 56,673 29,659
Goodwill 2,457 2,457
Deferred income tax assets 775
Other assets 346 555
Total assets $318,664 $190,648
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $90,769 $30,704
Accrued warranty 10,824 6,381
Accrued compensation and
related taxes 10,431 7,712
Accrued vacation 1,758 1,483
Accrued customer rebates 1,963 3,471
Deposits from customers 5,540 7,465
Taxes on income 551 1,566
Other current liabilities and
accrued expenses 3,367 2,591
Current portion of long-term debt 522 521
Total current liabilities 125,725 61,894
Long-term debt, less current portion 62,695 25,218
Other non-current liabilities 1,025
Deferred income tax liabilities 355
Shareholders' equity:
Common stock 324 317
Additional paid in capital 62,649 54,233
Retained earnings 66,246 48,631
Total shareholders' equity 129,219 103,181
Total liabilities and
shareholders' equity $318,664 $190,648
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three Months Ended December 31, 2007 and 2006
December 31, 2007 December 31, 2006
$-000- % $-000- %
Sales 237,567 123,608
Cost of Products Sold 207,345 102,840
Gross Profit 30,222 12.7 20,768 16.8
Operating Expenses:
Research and Development 4,543 1.9 3,720 3.0
Selling, General and
Administrative 12,541 5.3 10,865 8.8
Total Operating Expenses 17,084 7.2 14,585 11.8
Operating Income 13,138 5.5 6,183 5.0
Other Income (Expense):
Interest Expense (830) (0.3) (196) (0.2)
Interest and Other Income 205 0.1 291 0.3
Total Other Income (Expense) (625) (0.2) 95 0.1
Earnings before Taxes on Income 12,513 5.3 6,278 5.1
Taxes on Income 4,301 1.8 2,998 2.4
Net Earnings 8,212 3.5 3,280 2.7
Basic Net Earnings per Share 0.26 0.11
Diluted Net Earnings per Share 0.25 0.10
Basic Weighted Average Common Shares
Outstanding 32,070 30,931
Diluted Weighted Average Common
Shares Outstanding 32,780 32,031
Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Twelve Months Ended December 31, 2007 and 2006
December 31, 2007 December 31, 2006
$-000- % $-000- %
Sales 681,922 445,378
Cost of Products Sold 585,421 372,002
Gross Profit 96,501 14.2 73,376 16.5
Operating Expenses:
Research and Development 15,868 2.3 12,622 2.8
Selling, General and
Administrative 41,383 6.1 33,446 7.6
Total Operating Expenses 57,251 8.4 46,068 10.4
Operating Income 39,250 5.8 27,308 6.1
Other Income (Expense):
Interest Expense (1,748) (0.3) (347) (0.0)
Interest and Other Income 725 0.1 1,011 0.2
Total Other Income (Expense) (1,023) (0.2) 664 0.2
Earnings before Taxes on Income 38,227 5.6 27,972 6.3
Taxes on Income 13,723 2.0 11,144 2.5
Net Earnings 24,504 3.6 16,828 3.8
Basic Net Earnings per Share 0.77 0.57
Diluted Net Earnings per Share 0.75 0.55
Basic Weighted Average Common Shares
Outstanding 31,935 29,606
Diluted Weighted Average Common
Shares Outstanding 32,833 30,531
Spartan Motors, Inc. and Subsidiaries
Sales and Other Financial Information by Business Segment
Quarter Ended December 31, 2007
Three Months Ended December 31, 2007 (amounts in thousands)
Business Segments
Chassis EVTeam Other Consolidated
Motorhome Chassis Sales 52,145 52,145
Fire Truck Chassis Sales 28,899 (1,176) 27,723
EVTeam Product Sales 27,590 27,590
Other Product Sales 130,109 130,109
Total Net Sales 211,153 27,590 (1,176) 237,567
Interest Expense (Income) 469 361 830
Depreciation Expense 529 273 478 1,280
Segment Net Earnings (Loss) 12,991 (1,779) (3,000) 8,212
Twelve Months Ended December 31, 2007 (amounts in thousands)
Business Segments
Chassis EVTeam Other Consolidated
Motorhome Chassis Sales 217,225 217,225
Fire Truck Chassis Sales 116,236 (23,041) 93,195
EVTeam Product Sales 89,453 89,453
Other Product Sales 282,049 282,049
Total Net Sales 615,510 89,453 (23,041) 681,922
Interest Expense (Income) 1,618 130 1,748
Depreciation Expense 1,796 1,165 1,102 4,063
Segment Net Earnings (Loss) 34,815 (5,069) (5,242) 24,504
Period End Backlog (amounts in thousands)
December March June September December
31, 31, 30, 30, 31,
2006 2007 2007 2007 2007
Motorhome Chassis * 28,198 37,679 23,768 26,097 27,312
Fire Truck Chassis * 84,445 84,416 72,097 67,071 60,374
Other Product * 49,729 53,178 131,801 228,803 199,362
Total Chassis 162,372 175,273 227,666 321,971 287,048
EVTeam Product * 69,715 74,843 62,691 61,178 51,316
Total Backlog 232,087 250,116 290,357 383,149 338,364
* 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.
02/14/2008
CONTACT: John Sztykiel, CEO, or Jim Knapp, CFO, both of Spartan Motors,
Inc.+1-517-543-6400or Jeff Lambert or Ryan McGrath, both of Lambert,
Edwards & Associates+1-616-233-0500[email protected], for
Spartan Motors, Inc.
Web site: http//theshyftgroup.com
(SPAR)