- Net sales of $196.5 million, up 28.8% compared to second quarter
2007 CHARLOTTE, Mich., July 24 /PRNewswire-FirstCall/ -- Spartan
Motors, Inc. (NASDAQ:SPAR) reported its best second quarter in
company history with a 28.8 percent year-over-year increase in
revenues and a 59.8 percent year-over-year increase in net
earnings, overcoming challenges in several of its end markets.
Second Quarter Results Spartan reported net earnings of $10.4
million, or $0.32 per diluted share, on net sales of $196.5 million
for the second quarter ended June 30, 2008, compared with net
earnings of $6.5 million, or $0.20 per diluted share, on net sales
of $152.6 million in the same quarter of 2007. "The company posted
a solid second quarter, particularly given a shift in military
business from the second quarter to the third quarter, and the
sharp decline in the RV market," said John Sztykiel, president and
CEO of Spartan Motors. "Despite these challenges, Spartan improved
its earnings nearly 60 percent year-over-year, and our earnings for
the first six months of 2008 have surpassed our earnings for the
whole of 2007. "This quarter is another illustration of how our
market diversification and flexible manufacturing model has enabled
us to grow sales, while controlling our cost structure in tough
economic times. Our multiple markets -- emergency-rescue, RV and
specialty vehicles, as well as our service, parts and accessories
business -- are providing us with growth and enabling us to better
manage risk." Spartan said supply chain issues relative to a
production ramp-up, as well as parts, shifted part of the
production schedule of a significant military vehicle order from
the second quarter to the second half of 2008, with a significant
portion of this order remaining in the backlog as of the end of the
quarter. "As in past quarters, military vehicle production can be
difficult to forecast month-to-month, as there are strategic supply
ramp-up issues to overcome with each vehicle redesign," said
Sztykiel. "At the same time, the company experienced softer than
expected conditions in the motorhome chassis market, with industry
wholesale shipments of Class A motorhomes down 39.5 percent
year-over-year through May, according to the latest data from the
Recreational Vehicle Industry Association (RVIA)." Spartan Motors'
consolidated backlog increased 10.3 percent year-over-year, to
approximately $320.2 million as of June 30, 2008. Spartan Motors
anticipates fulfilling its current backlog orders by May 2009.
Spartan reported gross margin of 17.2 percent in the second quarter
of 2008, an increase over a gross margin of 15.7 percent in the
same period in 2007. Spartan attributed the year-over-year increase
in gross profit to increased sales, product mix, higher absorption
of overhead and more favorable warranty costs. Through the first
six months of 2008, Spartan's sales increased 55.9 percent compared
with the same period of last year, while net earnings increased
83.6 percent compared to the six-month period in 2007. The company
reported net earnings per diluted share of $0.77 per share for the
first six months of 2007, compared with net earnings per diluted
share of $0.42 per share in the same period of 2007. Spartan
Chassis Sales at Spartan Chassis, the company's largest subsidiary
and operating unit, increased 31.6 percent year-over year to $180.8
million for the current quarter. Spartan Chassis represented 92
percent of Spartan Motors' total consolidated sales in the 2008
second quarter. Second quarter earnings at Spartan Chassis improved
53.9 percent year-over-year, and the unit's backlog as of June 30,
2008 increased 21.7 percent year-over-year. Spartan's chassis sales
to the Class A diesel motorhome market decreased 50.0 percent
year-over-year in the quarter. Spartan's backlog for RV chassis
decreased 47.3 percent year-over-year to $12.5 million as of June
30, 2008. Sales of fire truck chassis in the quarter decreased 11.2
percent compared to the same period of last year, though this
segment reported significant improvement in gross margin. Backlog
for fire truck chassis at the end of the 2008 second quarter was
$75.9 million, a 5.3 percent increase compared to the prior year.
Other Product sales, including specialty chassis for MRAP military
vehicles, and Spartan Chassis' growing service, parts and
accessories (SPA) business, increased 159.5 percent year-over-year
in the second quarter of 2008. Backlog for Other Products increased
43.1 percent year-over-year to $188.7 million as of June 30, 2008.
The backlog for Other Products includes a significant order for
military vehicles that Spartan expects to produce in the second
half of 2008. Emergency Vehicle Team (EVTeam) Spartan's EVTeam
operating unit, consisting of its Crimson Fire, Crimson Fire
Aerials and Road Rescue subsidiaries, reported a 6.0 percent
year-over-year increase in sales for the 2008 second quarter, and
represented 8 percent of total company-wide sales in the quarter.
Though the unit posted a net loss for the quarter, the EVTeam
reported a 25.2 percent improvement in segment bottom-line compared
to the second quarter of 2007. "While our goal remains for each
unit to be profitable on a stand-alone basis, without any
preferential treatment or pricing, the pull-through of Spartan
Chassis from the EVTeam continues to have a positive impact on
Spartan Motors' bottom line," said Sztykiel. Financial Position
Spartan reported an operating cash flow increase in the current
quarter of $35.3 million, driven largely by decreased working
capital needs. The company ended the quarter with $3.2 million in
cash and cash equivalents and $53.4 million in long-term debt, a
14.8 percent reduction in long-term debt since the end of 2007.
"Debt related to working capital in the second quarter decreased
compared to the 2008 first quarter to match the lower production
volumes, another indication of the flexibility of our business
model," said Jim Knapp, chief financial officer of Spartan Motors.
"We are closely monitoring material costs to mitigate the impact on
margins." On a consolidated basis, Spartan posted a return on
invested capital (ROIC) of 27.7 percent in the second quarter of
2008, compared to ROIC of 22.5 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. Market Outlook "The outlook for motorhome
chassis is challenging, though the RVIA is predicting the industry
will reach its bottom for shipments in 2008 or early 2009," said
Sztykiel. "With greater competitive pressures, our motorhome OEM
partners will likely need Spartan more than ever to protect their
market share. Our focus in motorhome chassis remains on expanding
the number of models riding on our chassis and increasing the
Spartan content per motorhome through more up-fit work, such as the
new bridge-beam product. "We continue to see smaller orders for
mine-blast protected vehicles. These military orders, though not
large enough individually to warrant separate announcements, are
for specialty variants of existing MRAP vehicles, or for related,
lighter vehicles. This trend of smaller orders for specialized and
lighter hardened vehicles is expected to stabilize into 2009." "Our
emergency-rescue products made good progress in the quarter, and
this progress is expected to continue into the second half of 2008.
Recent product introductions, as well as anticipated demand for
fire truck chassis and fire trucks ahead of the emissions change in
2010, are expected to drive Spartan's emergency-rescue business
into 2009. Several large players in the emergency-rescue market
continue to struggle, creating new opportunities for Spartan. We
also expect our service, parts and accessories business to become a
greater percentage of sales." Sztykiel concluded: "While the rise
in fuel costs are challenging, they are also forcing a
restructuring of society and its vehicles. Spartan's model has
always been centered on specialty vehicles evolving in advance of
society, which creates new opportunities for our flexible, fast and
multi-market business model. Our customer-centric philosophy and
customized products fill growing niches within our core markets.
Spartan's strength in innovation and track record of transforming
markets from commercial to custom allows us to create new niche
markets. We remain cautiously optimistic about our prospects in
2008 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
http://www.spartanmotors.com/ , click on "Shareholders," and then
on "Webcasts." About Spartan Motors Spartan Motors, Inc.
(http://www.spartanmotors.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 1,500 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 Balance Sheets June 30, 2008
December 31, 2007 $-000- $-000- ASSETS Current assets: Cash and
cash equivalents $3,166 $13,527 Accounts receivable, net 102,641
132,907 Inventories 113,107 103,076 Deferred income tax assets
6,925 6,925 Taxes receivable 1,908 Other current assets 2,144 1,978
Total current assets 229,891 258,413 Property, plant and equipment,
net 62,043 56,673 Goodwill 2,457 2,457 Deferred income tax assets
775 775 Other assets 209 346 Total assets $295,375 $318,664
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts
payable $50,808 $90,769 Accrued warranty 11,339 10,824 Accrued
compensation and related taxes 9,650 10,431 Accrued vacation 2,055
1,758 Accrued customer rebates 2,179 1,963 Deposits from customers
5,843 5,540 Taxes on income 551 Other current liabilities and
accrued expenses 4,641 3,367 Current portion of long-term debt 524
522 Total current liabilities 87,039 125,725 Other non-current
liabilities 1,108 1,025 Long-term debt, less current portion 53,433
62,696 Shareholders' equity: Common stock 326 324 Additional paid
in capital 63,644 62,648 Retained earnings 89,825 66,246 Total
shareholders' equity 153,795 129,218 Total liabilities and
shareholders' equity $295,375 $318,664 Spartan Motors, Inc. and
Subsidiaries Condensed Consolidated Statements of Income Three
Months Ended June 30, 2008 and 2007 June 30, 2008 June 30, 2007
$-000- % $-000- % Sales 196,520 152,583 Cost of Products Sold
162,772 128,570 Gross Profit 33,748 17.2 24,013 15.7 Operating
Expenses: Research and Development 4,743 2.4 3,696 2.4 Selling,
General and Administrative 12,886 6.6 9,670 6.3 Total Operating
Expenses 17,629 9.0 13,366 8.7 Operating Income 16,119 8.2 10,647
7.0 Other Income (Expense): Interest Expense (436) (0.2) (436)
(0.3) Interest and Other Income 199 0.1 192 0.1 Total Other Income
(Expense) (237) (0.1) (244) (0.2) Earnings before Taxes on Income
15,882 8.1 10,403 6.8 Taxes on Income 5,467 2.8 3,887 2.5 Net
Earnings 10,415 5.3 6,516 4.3 Basic Net Earnings per Share 0.33
0.20 Diluted Net Earnings per Share 0.32 0.20 Basic Weighted
Average Common Shares Outstanding 32,001 32,073 Diluted Weighted
Average Common Shares Outstanding 32,705 32,947 Spartan Motors,
Inc. and Subsidiaries Condensed Consolidated Statements of Income
Six Months Ended June 30, 2008 and 2007 June 30, 2008 June 30, 2007
$-000- % $-000- % Sales 460,615 295,465 Cost of Products Sold
386,238 246,761 Gross Profit 74,377 16.1 48,704 16.5 Operating
Expenses: Research and Development 9,430 2.0 7,486 2.5 Selling,
General and Administrative 25,426 5.5 19,151 6.5 Total Operating
Expenses 34,856 7.5 26,637 9.0 Operating Income 39,521 8.6 22,067
7.5 Other Income (Expense): Interest Expense (1,169) (0.3) (682)
(0.3) Interest and Other Income 293 0.1 329 0.1 Total Other Income
(Expense) (876) (0.2) (353) (0.2) Earnings before Taxes on Income
38,645 8.4 21,714 7.3 Taxes on Income 13,449 2.9 7,992 2.7 Net
Earnings 25,196 5.5 13,722 4.6 Basic Net Earnings per Share 0.79
0.43 Diluted Net Earnings per Share 0.77 0.42 Basic Weighted
Average Common Shares Outstanding 31,957 31,828 Diluted Weighted
Average Common Shares Outstanding 32,554 32,549 Spartan Motors,
Inc. and Subsidiaries Sales and Other Financial Information by
Business Segment Quarter and Six Months Ended June 30, 2008 Three
Months Ended June 30, 2008 (amounts in thousands of dollars)
Business Segments Chassis EVTeam Other Consolidated Motorhome
Chassis Sales 30,206 30,206 Fire Truck Chassis Sales 25,627 (6,259)
19,368 EVTeam Product Sales 22,007 22,007 Other Product Sales
124,939 124,939 Total Net Sales 180,772 22,007 (6,259) 196,520
Interest Expense 64 372 436 Depreciation Expense 649 297 463 1,409
Segment Net Earnings (Loss) 12,433 (714) (1,304) 10,415 Six Months
Ended June 30, 2008 (amounts in thousands of dollars) Business
Segments Chassis EVTeam Other Consolidated Motorhome Chassis Sales
68,351 68,351 Fire Truck Chassis Sales 55,364 (11,708) 43,656
EVTeam Product Sales 46,259 46,259 Other Product Sales 302,349
302,349 Total Net Sales 426,064 46,259 (11,708) 460,615 Interest
Expense 13 769 387 1,169 Depreciation Expense 1,238 578 920 2,736
Segment Net Earnings (Loss) 29,077 (1,150) (2,731) 25,196 Period
End Backlog (amounts in thousands of dollars) June 30, Sept. 30,
Dec.31, March 31, June 30, 2007 2007 2007 2008 2008 Motorhome
Chassis * 23,768 26,097 27,312 17,465 12,533 Fire Truck Chassis *
72,097 67,071 60,374 70,720 75,931 Other Product * 131,801 228,803
199,362 166,457 188,665 Total Chassis 227,666 321,971 287,048
254,642 277,129 EVTeam Product * 62,691 61,178 51,316 49,975 43,094
Total Backlog 290,357 383,149 338,364 304,617 320,223 * 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. DATASOURCE: Spartan Motors, Inc. CONTACT: John
Sztykiel, CEO, or Jim Knapp, CFO, both of Spartan Motors, Inc.,
+1-517-543-6400; or Jeff Lambert or Ryan McGrath, , both of
Lambert, Edwards & Associates, Inc. for Spartan Motors, Inc.,
+1-616-233-0500 Web site: http://www.spartanmotors.com/
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