CHARLOTTE, Mich., July 23 /PRNewswire-FirstCall/ -- Spartan Motors,
Inc. (NASDAQ:SPAR) reported strong second quarter operating results
despite difficult macro-economic and market conditions,
underscoring the long-term strength and success of the company's
agile and diverse business model. Spartan's second quarter
performance was highlighted by increased sales of emergency rescue
products, increased sales of service, parts and assemblies and
improved gross margins compared to the same quarter of 2008. For
the second quarter ended June 30, 2009, Spartan reported: -- Net
earnings of $0.16 per diluted share -- Net sales of $124.3 million
-- Gross margin of 20.3% of sales -- Return on invested capital of
12.1% -- Consolidated backlog of $160.7 million "This was a good
quarter, particularly in light of the short-term challenges facing
our markets," said John Sztykiel, president and CEO of Spartan
Motors. "Likewise, we're equally pleased with the consistent
performance through the first six months of the year and believe
our proven ability to flex the business and align costs with
current business trends bode well for the future." Second Quarter
Results Spartan reported second quarter net earnings of $5.4
million, or $0.16 per diluted share, on net sales of $124.3
million, compared with net earnings of $10.4 million, or $0.32 per
diluted share, on net sales of $196.5 million in the same quarter
of 2008. The reduction in revenue was due to lower sales to the
defense and recreational vehicle industries, partially offset by
increased sales of emergency-rescue products and service, parts and
assemblies. Spartan reported consolidated gross margin of 20.3
percent of sales in the second quarter of 2009, up from 17.2
percent in the same period in 2008. Spartan attributed the 18.0
percent year-over-year gross margin increase to improved product
mix from increased sales of service, parts and assemblies (SPA), as
well as lower commodity costs. This marks the fifth straight
quarter of year-over-year improvements in gross margin.
"Emergency-rescue product sales are strong and the EVTeam was
profitable again this quarter, an indication of emergency-rescue
and its potential as our largest, most stable market," said
Sztykiel. "Likewise, consolidated gross profit as a percentage of
sales continues to increase year-over-year, a significant
accomplishment in the face of a difficult RV market and decreased
orders in the defense market. "Our diversification across multiple
end markets remains a key strength and opportunity, particularly in
the defense industry, as have the proven expertise and production
capacity to handle additional defense vehicle subcontracts. We are
also actively pursuing additional orders as well as new development
projects for defense vehicles." Through the first six months of
2009, Spartan reported net sales of $239.8 million compared to net
sales of $460.6 million for the first six months of 2008. The
company reported net earnings per diluted share of $0.35 per share
for the first six months of 2009, compared with net earnings per
diluted share of $0.77 in the same period of 2008. Spartan Chassis
Sales at Spartan Chassis, the company's largest subsidiary and
operating unit, decreased 42.3 percent year-over year to $104.4
million for the current quarter. Spartan Chassis represented 84.0
percent of Spartan Motors' total consolidated sales in the 2009
second quarter. Spartan Chassis' net quarterly earnings declined
45.7 percent year-over-year, in line with the decline in sales.
Sales of fire truck chassis in the current quarter increased 50.7
percent compared to the same period in 2008, and backlog for fire
truck chassis as of the close of the quarter was $84.8 million, a
11.7 percent year-over-year increase. Driving the growth were
customer purchase decisions ahead of the 2010 engine emission
standards change to engines, municipal spending budget cycles and
continued brand preferences for Spartan Chassis by customers and
fire departments. "For fire truck chassis, as well as for all of
emergency-rescue products, we continue to hold a positive outlook
and expect consistent results through the second half of 2009 and
into 2010," said Sztykiel. Spartan Chassis' sales to the Class A
diesel motorhome market declined 92.3 percent year-over-year in the
quarter, while backlog for RV chassis decreased 46.2 percent
year-over-year to $6.7 million as of June 30, 2009. "The current
outlook for motorhomes remains tough, though we have seen a slight
increase in demand for motorhome chassis in recent months and have
increased our production accordingly," said Sztykiel. "Spartan
continues to position itself for the eventual recovery in the RV
industry through product development and innovations to gain market
share. More than a half million people continue to enjoy their RVs
each day, an indication of how ingrained the RV lifestyle has
become in our culture." Other Products sales, which includes
specialty chassis for mine-resistant defense vehicles, and SPA
business, decreased 49.2 percent year-over-year in the second
quarter of 2009, reflecting the completion of several large orders
for defense customers in the second half of 2008. Other Products
backlog was $23.0 million as of June 30, 2009, compared to $188.7
million at the end of the 2008 second quarter. "During the quarter,
we completed several smaller defense subcontracts, including work
on mine resistant utility vehicles and similar MRAP variants," said
Sztykiel. "There remain many opportunities for limited run
specialized blast-protected variants, as well as opportunity to
upgrade and service the existing vehicles in service. We also
continue to be pleased with our SPA business, which increased its
sales year-over-year by 109.6 percent in the second quarter."
Emergency Vehicle Team (EVTeam) Spartan's EVTeam operating unit,
consisting of its Crimson Fire, Crimson Fire Aerials and Road
Rescue subsidiaries, reported operating income of $520 thousand in
the 2009 second quarter, compared to an operating loss of $794
thousand in the same quarter of 2008. Spartan attributed the
profitability of the EVTeam as a whole to increased sales of fire
trucks and improved operating efficiencies within the subsidiaries.
Backlog for the EVTeam was $72.4 million as of June 30, 2009, a
21.0 percent year-over-year increase. Financial Position Spartan
reported negative operating cash flow of $5.1 million in the
current quarter as a result of increased working capital
requirements. The company ended the second quarter with $16.8
million in cash and cash equivalents, as well as $16.3 million in
long-term debt. On a consolidated basis, Spartan posted a return on
invested capital (ROIC) of 12.1 percent in the second quarter of
2009, compared to ROIC of 27.7 percent for the same quarter in
2008. Spartan uses return on invested capital for internal
performance benchmarking, and defines ROIC as operating income less
taxes, on an annualized basis, divided by total shareholders'
equity. Market Outlook & Current Initiatives Spartan reiterated
it continues to expect its consolidated 2009 results to be less
than 2008 because of market and macro-economic conditions, as well
as a year-over-year reduction in RV chassis and specialty vehicle
sales for large-scale defense contracts. "We believe the next few
quarters will be challenging from an earnings perspective," said
Sztykiel. "Operationally, we are taking steps to manage costs,
improve efficiencies and ensure our business is sized in line with
demand across all of our subsidiaries and product lines. However,
as Spartan transforms from an opportunistic organization to one of
balanced strategic growth, the long-term opportunity is clearly
evident. As society changes, markets are changing and so are the
vehicles, and we plan to introduce new products and enter new
strategic markets over the next 9 to 12 months to capture this
opportunity. "As we execute this strategic growth from a lean
perspective, we are also taking proactive steps to better control
our supply chain through strategic fabrication, producing certain
value-added components within Spartan facilities. We expect this
operational initiative to gain momentum in the third quarter.
Longer term, Spartan's lean customer centric methodology represents
tremendous opportunity as time moves on when applied to the
complete vehicle and not just to the chassis and other components."
In the second quarter of 2009, Spartan added automotive industry
executive Thomas W. Gorman to the newly created position of chief
operating officer. Gorman will oversee Spartan's current four
business units in addition to implementing strategic growth
initiatives. Spartan also named former Herman Miller finance
executive Joseph M. Nowicki as chief financial officer. Nowicki
succeeds James Knapp, who previously announced his retirement.
Sztykiel concluded, "With the addition of Tom and Joe, we have the
critical leadership depth in place to ensure the next stage of
strategic growth at Spartan Motors. The current economic recession
is causing society to change, and changes in society always cause
vehicles to change. Historically, this change has been from
commercial to customized applications, a beneficial trend that puts
Spartan in excellent position for long-term growth in both existing
and new markets." Conference Call, Webcast and Roadcast 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/ on the web 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 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 June 30,
December 31, 2009 2008 --------- ---------- $-000- $-000- ------
------ ASSETS Current assets: Cash and cash equivalents $16,837
$13,741 Accounts receivable, net 77,270 75,935 Inventories 88,734
86,648 Deferred income tax assets 7,076 7,076 Taxes receivable
1,330 Deposits on engines 5,457 5,457 Other current assets 2,019
2,606 -------- -------- Total current assets 198,723 191,463
Property, plant and equipment, net 67,394 66,786 Goodwill 2,457
2,457 Deferred income tax assets 241 241 Other assets 1,328 193
-------- -------- Total assets $270,143 $261,140 ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts
payable $29,490 $21,776 Accrued warranty 4,885 8,352 Accrued
compensation and related taxes 6,854 12,136 Accrued vacation 2,203
1,904 Accrued customer rebates 1,400 1,498 Deposits from customers
10,363 9,922 Taxes on income 1,972 Other current liabilities and
accrued expenses 5,400 4,584 Current portion of long-term debt
10,519 10,640 -------- -------- Total current liabilities 71,114
72,784 Other non-current liabilities 1,888 1,157 Long-term debt,
less current portion 16,296 16,556 Shareholders' equity: Common
stock 329 326 Additional paid in capital 66,117 64,606 Retained
earnings 114,399 105,711 -------- -------- Total shareholders'
equity 180,845 170,643 -------- -------- Total liabilities and
shareholders' equity $270,143 $261,140 ======== ======== Spartan
Motors, Inc. and Subsidiaries Condensed Consolidated Statements of
Income Three Months Ended June 30, 2009 and 2008 June 30, 2009 June
30, 2008 ------------- ------------- $-000- % $-000- %
------------- ------------- Sales 124,269 196,520 Cost of Products
Sold 99,071 162,772 ------- ---- ------- ---- Gross Profit 25,198
20.3 33,748 17.2 ------- ---- ------- ---- Operating Expenses:
Research and Development 4,344 3.5 4,743 2.4 Selling, General and
Administrative 12,696 10.2 12,886 6.6 ------- --- ------- --- Total
Operating Expenses 17,040 13.7 17,629 9.0 ------- --- ------- ---
Operating Income 8,158 6.6 16,119 8.2 ------- --- ------- --- Other
Income (Expense): Interest Expense (330) (0.3) (436) (0.2) Interest
and Other Income 240 0.2 199 0.1 ------- --- ------- --- Total
Other Income (Expense) (90) (0.1) (237) (0.1) ------ --- -------
--- Earnings before Taxes on Income 8,068 6.5 15,882 8.1 ------ ---
------- --- Taxes on Income 2,690 2.2 5,467 2.8 ------ --- ------
--- Net Earnings 5,378 4.3 10,415 5.3 ====== === ====== === ------
------ Basic Net Earnings per Share 0.17 0.32 ====== ====== ------
------ Diluted Net Earnings per Share 0.16 0.32 ====== ====== Basic
Weighted Average Common Shares Outstanding 32,587 32,532 Diluted
Weighted Average Common Shares Outstanding 32,934 32,987 Spartan
Motors, Inc. and Subsidiaries Condensed Consolidated Statements of
Income Six Months Ended June 30, 2009 and 2008 June 30, 2009 June
30, 2008 ------------- ------------- $-000- % $-000- %
------------- ------------- Sales 239,767 460,615 Cost of Products
Sold 188,447 386,238 ------- ---- ------- ---- Gross Profit 51,320
21.4 74,377 16.1 ------- ---- ------- ---- Operating Expenses:
Research and Development 9,104 3.8 9,430 2.0 Selling, General and
Administrative 24,705 10.3 25,426 5.5 ------- ---- ------- ---
Total Operating Expenses 33,809 14.1 34,856 7.6 ------- ----
------- --- Operating Income 17,511 7.3 39,521 8.6 ------- ----
------ ---- Other Income (Expense): Interest Expense (655) (0.3)
(1,169) (0.3) Interest and Other Income 456 0.2 293 0.1 -------
---- ------ ---- Total Other Income (Expense) (199) (0.1) (876)
(0.2) ------- ---- ------ ---- Earnings before Taxes on Income
17,312 7.2 38,645 8.4 ------- ---- ------ ---- Taxes on Income
5,876 2.5 13,449 2.9 ------- ---- ------ ---- Net Earnings 11,436
4.8 25,196 5.5 ======= ==== ====== ==== ------- ------ Basic Net
Earnings per Share 0.35 0.78 ======= ====== ------- ------ Diluted
Net Earnings per Share 0.35 0.77 ======= ====== Basic Weighted
Average Common Shares Outstanding 32,583 32,494 Diluted Weighted
Average Common Shares Outstanding 32,798 32,863 Spartan Motors,
Inc. and Subsidiaries Sales and Other Financial Information by
Business Segment Three and Six Months Ended June 30, 2009 Three
Months Ended June 30, 2009 (amounts in thousands of dollars)
------------------------------------------------------------------
Business Segments ----------------- Chassis EVTeam Other
Consolidated ------- ------ ----- ------------ Fire Truck Chassis
Sales 38,618 (7,101) 31,517 Motorhome Chassis Sales 2,331 2,331
EVTeam Product Sales 26,990 26,990 Other Product Sales 63,431
63,431 ------ ------ ------ ------- Total Net Sales 104,380 26,990
(7,101) 124,269 ======= ====== ====== ======= Interest Expense
(Income) 450 (120) 330 Depreciation Expense 1,009 242 609 1,860
Segment Net Earnings (Loss) 6,748 92 (1,462) 5,378 Six Months Ended
June 30, 2009 (amounts in thousands)
----------------------------------------------------- Business
Segments ----------------- Chassis EVTeam Other Consolidated
------- ------ ----- ------------ Fire Truck Chassis Sales 71,867
(11,283) 60,584 Motorhome Chassis Sales 5,503 5,503 EVTeam Product
Sales 48,520 48,520 Other Product Sales 125,160 125,160 -------
------ ------ ------- Total Net Sales 202,530 48,520 (11,283)
239,767 ======= ====== ======= ======= Interest Expense (Income)
894 (239) 655 Depreciation Expense 1,996 454 1,210 3,660 Segment
Net Earnings (Loss) 13,445 148 (2,157) 11,436 Period End Backlog
(amounts in thousands of dollars)
---------------------------------------------------- June 30,
September 30, December 31, March 31, June 30, 2008 2008 2008 2009
2009 -------- ------------- ------------ --------- -------- Fire
Truck Chassis* 75,931 70,815 73,473 98,025 84,840 Motorhome
Chassis* 12,533 9,069 5,552 4,365 6,743 Other Product* 188,665
46,038 8,500 55,827 23,030 ------- ------ ----- ------ ------ Total
Chassis 277,129 125,922 87,525 158,217 114,613 EVTeam Product*
59,801 73,056 96,383 83,344 72,352 Intercompany Eliminations
(16,707) (15,206) (14,009) (24,050) (26,232) ------- ------ -----
------ ------ Total Backlog 320,223 183,772 169,899 217,511 160,733
======= ======= ======= ======= ======= * 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. Service, parts and accessories were included in the
backlog beginning March 31, 2009. DATASOURCE: Spartan Motors, Inc.
CONTACT: John Sztykiel, CEO, or Joe Nowicki, CFO, both of Spartan
Motors, Inc., +1-517-543-6400, or Jeff Lambert or Ryan McGrath of
Lambert, Edwards & Associates, Inc., +1-616-233-0500, Web Site:
http://www.spartanmotors.com/
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