CHARLOTTE, Mich., Feb. 18 /PRNewswire-FirstCall/ -- Spartan Motors,
Inc. (NASDAQ:SPAR) today announced results for its 2009 fourth
quarter and full year, which included the completion of the
Company's acquisition of Utilimaster on Nov. 30, 2009.
Fourth-quarter highlights: -- Net sales of $100.5 million -- Gross
margin of 14.9 percent of sales -- Operating expenses of $15.0
million (15.0 percent of sales) -- Total one-time
acquisition-related charges of $1.2 million -- Net loss of $0.01
per diluted share (adjusted earnings of $0.01 per share, excluding
impact of acquisition) -- Ending cash balance of $18.5 million (a
34.5 percent increase over Q408) -- Consolidated backlog of $247.6
million at year end 2009 "We are pleased in some respects with the
accomplishments of our team during a very demanding quarter," said
John Sztykiel, President and CEO of Spartan Motors. "On the
positive side, we completed the purchase of Utilimaster and began
our integration efforts, while continuing to align our core
business to the current level of demand. On a negative note, we
lost money, which is something we do not do often. That said, we
are starting to see meaningful improvements in some markets, such
as fire trucks and motorhomes, as consolidated backlog, excluding
the new Utilimaster acquisition, rose 25.7 percent from the prior
year and 35.6 percent from the third quarter of 2009." Consolidated
net sales for the quarter were $100.5 million, up 12.0 percent
sequentially from Q309 due to the incremental Utilimaster sales,
which were partially offset by lower service parts and assemblies
(SPA) sales. Compared with the fourth quarter of 2008, net sales
fell 31.3 percent due mainly to the completion of a large-scale
defense vehicle contract in 2008, as well as lower SPA sales in the
current quarter. By contrast, Spartan's EVTeam operating segment,
which consists of its Crimson Fire, Crimson Fire Aerials and Road
Rescue subsidiaries, reported a 13.3 percent year-over-year
increase in sales for the 2009 fourth quarter. Sales of fire truck
chassis in the quarter also increased 15.0 percent compared to the
same period in 2008. Likewise, Spartan's chassis sales to the Class
A diesel motorhome market more than doubled in the quarter, driven
by new products and recent improvements in the recreational vehicle
(RV) market. With the lower sales levels compared to the prior year
and a shift in revenue mix toward lower-margin products, gross
margin in Q409 fell to 14.9 percent of sales from 21.1 percent in
Q408. Spartan attributed the change in margins to a shift in
revenue mix from defense and SPA sales to motorhome and fire truck
chassis. In addition, margins were adversely impacted in Q409 by
approximately $0.5 million related to the inventory valuation
associated with the Utilimaster acquisition. On a sequential basis,
gross margin declined from 17.6 percent in Q309 due primarily to
the shift in mix from SPA to motorhome and fire truck chassis.
Operating expenses for the 2009 fourth quarter declined by $8.8
million, or 37.0 percent, compared to the same period last year.
Spartan attributed the improvement due to the absence of $6.0
million in one-time settlement costs incurred in 2008, as well as
the Company's continued efforts to control operating expenses,
which were offset partially by the additional operating expenses
from Utilimaster. Total operating expenses in the quarter,
inclusive of $0.7 million in acquisition-related costs, were $15.0
million, down from $23.8 million in the same period last year.
Operating expenses in the quarter included incremental R&D
expenses associated with chassis that are compliant with the new
2010 emission standards, as well as development costs associated
with a new product at Utilimaster. On a sequential basis, operating
expenses increased from $14.6 million in Q309, primarily due to the
additional operating expenses from Utilimaster of approximately
$1.4 million, partially offset by a $0.7 million reduction in
restructuring charges. Net loss for the quarter was $0.4 million,
or $0.01 per diluted share, which included one-time pre-tax charges
of $1.2 million related to Spartan's acquisition of Utilimaster.
Excluding these items, the adjusted earnings per diluted share
would have been $0.01. Joe Nowicki, Chief Financial Officer, said:
"While we made solid progress on our cost structure in the fourth
quarter, we still have work to do in 2010. With the shift in
revenue mix we experienced last quarter, we must continue to focus
on improving efficiencies and reducing costs to align our spending
with current demand. In the near term, we will also see the impact
of increased investments in R&D on our bottom line, but we
believe these investments are essential to our long-term growth and
profit expansion. We also continue to place a priority on managing
our balance sheet and cash flow, and we see opportunities for
continued improvement in these areas in 2010." For the full year,
Spartan reported net sales of $429.9 million, compared with net
sales of $844.4 million in 2008. The decline in sales for the year
was primarily the result of the completion of a large defense order
in 2008 combined with softness in the current motorhome market.
Gross profit fell with the lower revenue level, but as a percent of
sales, gross margin increased to 19.0 percent in 2009, up from 17.5
percent in 2008, due mainly to a shift in mix toward higher margin
products. Operating expenses for the year were reduced by $16.2
million to $63.4 million due to the Company's continued focus on
controlling operating expenses, as well as the absence of $6.0
million in one-time settlement costs incurred in 2008. Operating
expenses for 2009 also included $0.7 million in charges relating to
Spartan's restructuring, which took place primarily in the third
quarter, as well as $0.7 million in costs related to the
acquisition of Utilimaster in the fourth quarter. Income from
operations for the year was $18.6 million, compared with $68.7
million in 2008. On the bottom line, Spartan reported net income of
$11.8 million for 2009, or $0.36 per diluted share, versus net
income of $42.7 million, or $1.30 per diluted share, in the prior
year. Excluding one-time charges related to restructuring and
merger activities, the 2009 adjusted earnings would have been $0.40
per diluted share. Backlog at Dec. 31, 2009 stood at $247.6
million, up 45.7 percent from $169.9 million at Dec. 31, 2008.
Excluding the $34.1 million backlog from Utilimaster, Spartan's
total backlog increased by 25.7 percent over the prior year. Also
excluding backlogs for SPA, which were not included in consolidated
backlog in 2008, total backlogs would have increased 18.9 percent
from the prior year. The improvement in backlog was driven by
significantly improved order flow in motorhome and fire truck
chassis ahead of updated emissions standards scheduled to take
effect in 2010. Spartan reported positive operating cash flow of
$38.1 million in the year ended Dec. 31, 2009, due primarily to
reduced working capital requirements. The company ended the year
with $18.5 million in cash and cash equivalents, and $35.2 million
in long-term debt, an increase from $16.6 million at Dec. 31, 2008,
which was due mainly to the financing of approximately $43.0
million for the acquisition of Utilimaster in the fourth quarter.
In 2009, Spartan reduced accounts receivable by 38.9 percent
compared to levels at the end of 2008, which was a result of the
Company's continued efforts to improve collections. Inventory
levels increased slightly during the year due to the addition of
Utilimaster. On a consolidated basis, Spartan posted a return on
invested capital (ROIC) of 6.8 percent for the year ended 2009.
Spartan uses ROIC, defined as operating income less taxes, on an
annualized basis, divided by total shareholders' equity, for
internal performance benchmarking. Sztykiel concluded: "From a
full-year perspective, we accomplished a lot in 2009, achieving
profitability despite a 49.1 percent drop in sales, significantly
diversifying our business through the great synergy opportunities
we expect with the Utilimaster acquisition, and realigning our cost
and operational structure. Adding Utilimaster to our portfolio of
specialty vehicle brands provides us with important inroads into a
new market, and we expect our continued investments in new products
to help keep Spartan at the forefront of specialty vehicle
innovation. While we are seeing some improvement in fire trucks and
motorhomes, other areas of our core markets remain difficult. As we
work our way towards recovery, we will remain vigilant in
controlling our costs and enhancing the efficiency of our
operations, which should afford us the flexibility to meet changing
market conditions directly and profitably." Reconciliation of
Non-GAAP Financial Measures This release contains Adjusted Earnings
Per Share, which is a Non-GAAP financial measure. Adjusted Earnings
Per Share is calculated by excluding from Earnings Per Share items
that we believe to be infrequent or not indicative of our operating
performance. For the periods covered by this release, such items
consist of the following: expenses associated with restructuring
actions taken to adjust our cost structure to the current business
climate; closing and start-up costs related to mergers and
acquisitions; and one-time settlement costs. We present Adjusted
Earnings Per Share because we consider it to be an important
supplemental measure of our performance and believe it to be useful
in showing ongoing results from operations distinct from items that
are infrequent or not indicative of our operating performance.
Adjusted Earnings Per Share is not a measurement of our financial
performance under GAAP and should not be considered as an
alternative to Earnings Per Share under GAAP. Adjusted Earnings Per
Share has limitations as an analytical tool, 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, 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 is not intended to
suggest 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 only as a supplement. The following table reconciles
Adjusted Earnings Per Share to Earnings Per Share for the periods
indicated. Financial Summary (Non-GAAP) (unaudited) Three Months
Ended Twelve Months Ended December 31, December 31, 2009 2008 2009
2008 ---- ---- ---- ---- Earnings (Loss) per Share - Diluted
$(0.01) $0.09 $0.36 $1.30 Add Back: Settlement Costs 0.17 0.17 Add
Back: Acquisition Related Expenses 0.02 - 0.02 - Add Back:
Restructuring Charges - - 0.02 - --- --- ---- --- Adjusted Earnings
per Share - Diluted $0.01 $0.26 $0.40 $1.47 ===== ===== ===== =====
Conference Call, Webcast and Roadcast(TM) 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
http://www.spartanmotors.com/, click on "Shareholders," and then on
"Webcasts." Spartan also will update the financial information on
its Roadcast "digital roadshow" for investors. To launch the
Spartan Motors Roadcast, please visit http://www.spartanmotors.com/
and look for the "Virtual Road Show" link on the right side of the
page. About Spartan Motors Spartan Motors, Inc.
(http://www.spartanmotors.com/) designs, engineers and manufactures
specialty chassis, specialty vehicles and truck bodies and
aftermarket parts for the outdoor recreation/RV,
emergency-response, defense, delivery and service markets. The
company's brand names - Spartan(TM), Crimson Fire(TM), Crimson Fire
Aerials(TM), Road Rescue(TM) and Utilimaster® - are known for
quality, value, service and being the first to market with
innovative products. The company employs approximately 1,600 at
facilities in Michigan, Pennsylvania, South Carolina, South Dakota,
Indiana and Texas. Spartan reported sales of $430 million in 2009
and is focused on becoming a global leader in the manufacture of
specialty vehicles and chassis. 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 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 December 31, 2009 and 2008 December 31, 2009 December
31, 2008 ----------------- ----------------- $000 % $000 % ---- ---
---- --- Sales 100,455 146,314 Cost of Products Sold 85,526 115,387
Restructuring Charges 5 --- --- --- --- Gross Profit 14,924 14.9
30,927 21.1 ------ ---- ------ ---- Operating Expenses: Research
and Development 4,463 4.5 4,814 3.3 Selling, General and
Administrative 10,507 10.5 18,971 12.9 Restructuring Charges 21 0.0
--- --- --- --- Total Operating Expenses 14,991 15.0 23,785 16.2
Operating Income (Loss) (67) (0.1) 7,142 4.9 --- ---- ----- ---
Other Income (Expense): Interest Expense (355) (0.4) (251) (0.2)
Interest and Other Income 32 0.1 56 0.0 --- --- --- --- Total Other
Income (Expense) (323) (0.3) (195) (0.2) Earnings (Loss) before
Taxes on Income (Loss) (390) (0.4) 6,947 4.7 ---- ---- ----- ---
Taxes on Income (Loss) 23 - 4,085 2.8 Net Earnings (Loss) (413)
(0.4) 2,862 1.9 ==== ==== ===== === Basic Net Earnings (Loss) per
Share (0.01) 0.09 ===== ==== Diluted Net Earnings (Loss) per Share
(0.01) 0.09 ===== ==== Basic Weighted Average Common Shares
Outstanding 32,755 32,668 Diluted Weighted Average Common Shares
Outstanding 32,755 32,729 Spartan Motors, Inc. and Subsidiaries
Condensed Consolidated Statements of Income Twelve Months Ended
December 31, 2009 and 2008 December 31, 2009 December 31, 2008
----------------- ----------------- $000 % $000 % ---- --- ---- ---
Sales 429,926 844,390 Cost of Products Sold 347,647 696,120
Restructuring Charges 270 --- --- --- --- Gross Profit 82,009 19.0
148,270 17.5 ------ ---- ------- ---- Operating Expenses: Research
and Development 17,690 4.1 19,461 2.3 Selling, General and
Administrative 44,961 10.4 60,097 7.1 Restructuring Charges 713 0.2
--- --- --- --- Total Operating Expenses 63,364 14.7 79,558 9.4
Operating Income 18,645 4.3 68,712 8.1 ------ --- ------ --- Other
Income (Expense): Interest Expense (1,339) (0.3) (2,062) (0.2)
Interest and Other Income 753 0.2 679 0.1 --- --- --- --- Total
Other Income (Expense) (586) (0.1) (1,383) (0.1) Earnings before
Taxes on Income 18,059 4.2 67,329 8.0 ------ --- ------ --- Taxes
on Income 6,287 1.5 24,615 2.9 Net Earnings 11,772 2.7 42,714 5.1
====== === ====== === Basic Net Earnings per Share 0.36 1.31 ====
==== Diluted Net Earnings per Share 0.36 1.30 ==== ==== Basic
Weighted Average Common Shares Outstanding 32,729 32,582 Diluted
Weighted Average Common Shares Outstanding 32,916 32,817 Spartan
Motors, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
December 31, December 31, 2009 2008 ------------- -------------
$000 $000 ---- ---- ASSETS Current assets: Cash and cash
equivalents $18,475 $13,741 Accounts receivable, net 46,377 75,935
Inventories 102,401 86,648 Deferred income tax assets 6,984 7,076
Taxes receivable 4,212 - Deposits on engines - 5,457 Other current
assets 3,664 2,606 ----- ----- Total current assets 182,113 191,463
Property, plant and equipment, net 80,228 66,786 Goodwill and other
intangible assets, net 29,895 2,457 Deferred income tax assets -
241 Other assets 1,041 193 ----- --- Total assets $293,277 $261,140
======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable $20,131 $21,776 Accrued warranty
6,692 8,352 Accrued compensation and related taxes 5,520 12,136
Accrued vacation 1,912 1,904 Accrued customer rebates 1,324 1,498
Deposits from customers 11,992 9,922 Taxes on income - 1,972 Other
current liabilities and accrued expenses 6,300 4,584 Current
portion of long-term debt 11,146 10,640 ------ ------ Total current
liabilities 65,017 72,784 Other non-current liabilities 4,195 1,157
Long-term debt, less current portion 35,204 16,556 Deferred income
tax liabilities 8,341 - Shareholders' equity: Common stock 329 326
Additional paid in capital 67,099 64,606 Retained earnings 113,092
105,711 ------- ------- Total shareholders' equity 180,520 170,643
Total liabilities and shareholders' equity $293,277 $261,140
======== ======== Spartan Motors, Inc. and Subsidiaries Sales and
Other Financial Information by Business Segment Three and Twelve
Months Ended December 31, 2009 Unaudited Three Months Ended
December 31, 2009 (amounts in thousands of dollars) Business
Segments ------------------------------ Chassis EVTeam Utilimaster*
Other Consolidated ------- ------ ------------ ----- ------------
Fire Truck Chassis Sales 37,500 (7,745) 29,755 Motorhome Chassis
Sales 19,039 19,039 EVTeam Product Sales 25,309 25,309 Utilimaster
Product Sales 13,248 13,248 Other Product Sales Specialty Vehicles
2,710 2,710 Service Parts and Accessories 10,394 10,394 ------
------ Total Net Sales 69,643 25,309 13,248 (7,745) 100,455 ======
====== ====== ====== ======= Interest Expense (Income) - 516 17
(178) 355 Depreciation and Amortization Expense 1,086 235 357 594
2,272 Segment Net Earnings (Loss) 2,030 (106) (663) (1,674) (413)
Twelve Months Ended December 31, 2009 (amounts in thousands of
dollars) Business Segments ----------------------------- Chassis
EVTeam Utilimaster* Other Consolidated ------- ------ ------------
----- ------------ Fire Truck Chassis Sales 149,719 (29,070)
120,649 Motorhome Chassis Sales 35,613 35,613 EVTeam Product Sales
95,692 95,692 Utilimaster Product Sales 13,248 13,248 Other Product
Sales Specialty Vehicles 24,402 24,402 Service Parts and
Accessories 140,322 140,322 ------- ------- Total Net Sales 350,056
95,692 13,248 (29,070) 429,926 ======= ====== ====== =======
======= Interest Expense (Income) - 1,836 17 (514) 1,339
Depreciation and Amortization Expense 4,150 928 357 2,330 7,765
Segment Net Earnings (Loss) 18,666 (1,160) (663) (5,071) 11,772
Period End Backlog (amounts in thousands of dollars) Dec. 31, March
31, June 30, Sept. 30, Dec. 31, 2008 2009 2009 2009 2009 --------
--------- -------- --------- -------- Fire Truck Chassis** 73,473
98,025 84,840 82,386 123,791 Motorhome Chassis** 5,552 4,365 6,743
9,589 20,022 Other Product** Specialty Vehicles 8,500 8,064 2,781
4,214 16,970 Service Parts and Accessories 47,763 20,249 8,725
11,467 ----- ------ ------ ----- ------ Total Chassis 87,525
158,217 114,613 104,914 172,250 EVTeam Product** 96,383 83,344
72,352 72,615 72,402 Utilimaster Product** 34,059 Intercompany
Eliminations (14,009) (24,050) (26,232) (20,056) (31,113) -------
------- ------- ------- ------- Total Backlog 169,899 217,511
160,733 157,473 247,598 * Results for Utilimaster represent one
month of activity and related segment net loss includes
approximately $500 thousand of non-recurring charges related to the
inventory valuation associated with the acquisition. ** Anticipated
time to fill backlog orders; 2 months or less for motorhome
chassis, 6 months or less for Utilimaster and 10 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 and Utilimaster was included in the backlog beginning December
31, 2009. DATASOURCE: Spartan Motors, Inc. CONTACT: John Sztykiel,
CEO, or Joseph Nowicki, CFO, Spartan Motors, Inc., +1-517-543-6400;
Jeff Lambert or Jeff Tryka, CFA, , both of Lambert, Edwards &
Associates, +1-616-233-0500 Web Site: http://www.spartanmotors.com/
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