- Net sales of $264.1 million; Increased 11.2% compared to fourth
quarter 2007 CHARLOTTE, Mich., April 24 /PRNewswire-FirstCall/ --
Spartan Motors, Inc. (NASDAQ:SPAR) reported its best quarter in
company history with a 84.8 percent year-over-year increase in
revenues and a 105.1 percent year-over-year increase in net
earnings. First Quarter Results Spartan reported net earnings of
$14.8 million, or $0.45 per diluted share, on net sales of $264.1
million in the first quarter ended March 31, 2008, compared with
net earnings of $7.2 million, or $0.22 per diluted share, on net
sales of $142.9 million in same quarter of 2007. "The first quarter
was an illustration of our flexible manufacturing model, which
enabled us to take advantage of our multiple market strategy," said
John Sztykiel, president and CEO of Spartan Motors. "As we
experienced lower demand for motorhome chassis, we emphasized our
operational focus on products for our military and emergency-rescue
customers. We rescaled our motorhome chassis operations to
accommodate the expected decrease in industry demand. The result
was increased sales and improved efficiencies." Spartan Motors'
consolidated backlog decreased 5.1 percent year-over-year to
approximately $237.3 million as of March 31, 2008. Spartan Motors
anticipates fulfilling its current backlog orders by January 2009.
The current backlog does not include the $45 million order from
General Dynamics Land Systems and Force Protection announced in
April 2008. Spartan reported gross margin of 15.4 percent in the
first quarter of 2008, a decrease compared with gross margin of
17.3 percent in the same period in 2007, but a 21.3 percent
improvement over gross margin of 12.7 percent for the 2007 fourth
quarter. Spartan attributed the year-over-year decrease in gross
margin to product mix and volume pricing pressures from its
military customers. Spartan reported the increase in gross margin
compared to the 2007 fourth quarter was due to improved operational
efficiencies. Spartan Chassis Sales at Spartan Chassis, the
company's largest subsidiary and operating unit, increased 91.6
percent year-over year to $245.3 million for the 2008 first
quarter. Sales from Spartan Chassis were 92.9 percent of Spartan
Motors' total consolidated sales in the 2008 first quarter. First
quarter net earnings at Spartan Chassis improved 99.1 percent
year-over-year, and the unit's backlog as of March 31, 2008
increased 6.9 percent year-over-year. Spartan's chassis sales to
the Class A diesel motorhome market decreased 32.1 percent
year-over-year in the 2008 first quarter, a favorable comparison to
the 33.3 percent year-over-year decrease in industry wholesale
shipments for the first two months of 2008, the latest data
available from the Recreational Vehicle Industry Association
(RVIA). Spartan's backlog for RV chassis decreased 53.6 percent
year-over-year to $17.5 million as of March 31, 2008. Sales of fire
truck chassis decreased 2.9 percent in the first quarter of 2008
compared to the same period of last year. Backlog for fire truck
chassis at the end of the 2008 first quarter was $70.7 million, a
16.2 percent decrease compared to the 2007 first quarter. Compared
to the fourth quarter 2007, backlog for fire truck chassis
increased 17.1 percent as Spartan's OEM customers improved
production in response to better competitive conditions. Other
product sales, including specialty chassis for MRAP military
vehicles, and Spartan Chassis' growing service, parts and
accessories (SPA) business, increased 330.2 percent year-over-year
in the first quarter of 2007. Backlog for other products increased
86.5 percent year-over-year to $99.2 million as of March 31, 2008.
Emergency Vehicle Team (EVTeam) Spartan's EVTeam operating unit,
consisting of its Crimson Fire, Crimson Fire Aerials and Road
Rescue subsidiaries, reported a 13.3 percent year-over-year
increase in sales for the 2008 first quarter. Though the unit
posted a net loss for the quarter, the EVTeam reported a 39.6
percent improvement in segment bottom-line compared to the first
quarter of 2007, and a 75.5 percent improvement compared to the
fourth quarter of 2007. Financial Position Spartan reported an
operating cash flow decrease in the 2008 first quarter of $26.6
million compared to a decrease of $6.6 million in the same quarter
of 2007, driven largely by increased working capital needs required
by the 84.8 percent year-over-year increase in sales in the 2008
first quarter. On a consolidated basis, Spartan posted a return on
invested capital (ROIC) of 42.6 percent in the first quarter of
2008, compared to ROIC of 25.7 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. The company ended the quarter with $84.6
million in long-term debt, which includes financing for Spartan
Chassis' new facilities, as well as growth in working capital to
support the sales increase. Spartan reported $5.3 million in cash
and cash equivalents at the end of the 2008 first quarter. Future
Outlook "We believe our improved production efficiencies, along
with our strong consolidated backlog, will help generate
significant cash flow in the second half of 2008, which will be
utilized to grow the business and reduce debt," said Sztykiel.
"Based on key indicators such as increased emergency-rescue orders
in the first quarter, a slight improvement in motorhome chassis
orders in March, and the recent new orders from two of our military
customers, we are optimistic about 2008, yet we remain mindful of
the difficult economic conditions affecting one of our core
markets. "Looking ahead to the future, we remain a strategic
supplier to the hardened vehicle market for the U.S. and allied
foreign militaries for MRAP and similar programs. We are promoting
six new products in 2008 that will drive sales starting in 2009. At
Spartan Chassis, we are entering the commercial part of the fire
truck chassis and the First Response All Call (FRAC) market through
the Furion chassis. We are also adding more body up-fit work to our
motorhome chassis. "At Crimson Fire, we are promoting the Boomer,
entering the Government Services Administration/Wildfire (GSA)
market and showing a FRAC product developed jointly with Road
Rescue. At Road Rescue, we are adding a new handicap accessible
transport ambulance in addition to the joint FRAC product with
Crimson Fire. Between these new market opportunities and our
growing service, parts and accessories business, we like our
prospects for 2009 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 1,300 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. 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 Statements of Income Three
Months Ended March 31, 2008 and 2007 March 31, 2008 March 31, 2007
$-000- % $-000- % Sales 264,095 142,882 Cost of Products Sold
223,465 118,190 Gross Profit 40,630 15.4 24,692 17.3 Operating
Expenses: Research and Development 4,688 1.8 3,790 2.7 Selling,
General and Administrative 12,540 4.7 9,482 6.6 Total Operating
Expenses 17,228 6.5 13,272 9.3 Operating Income 23,402 8.9 11,420
8.0 Other Income (Expense): Interest Expense (732) (0.3) (246)
(0.2) Interest and Other Income 93 0.0 137 0.1 Total Other Income
(Expense) (639) (0.3) (109) (0.1) Earnings before Taxes on Income
22,763 8.6 11,311 7.9 Taxes on Income 7,982 3.0 4,104 2.9 Net
Earnings 14,781 5.6 7,207 5.0 Basic Net Earnings per Share 0.46
0.23 Diluted Net Earnings per Share 0.45 0.22 Basic Weighted
Average Common Shares Outstanding 31,954 31,655 Diluted Weighted
Average Common Shares Outstanding 32,512 32,610 Spartan Motors,
Inc. and Subsidiaries Condensed Consolidated Balance Sheets March
31, 2008 December 31, 2007 $-000- $-000- ASSETS Current assets:
Cash and cash equivalents $5,298 $13,527 Accounts receivable, net
171,708 132,907 Inventories 95,461 103,076 Deferred income tax
assets 6,925 6,925 Other current assets 3,461 1,978 Total current
assets 282,853 258,413 Property, plant and equipment, net 59,292
56,673 Goodwill 2,457 2,457 Deferred income tax assets 775 775
Other assets 261 346 Total assets $345,638 $318,664 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $71,790
$90,769 Accrued warranty 11,536 10,824 Accrued compensation and
related taxes 8,748 10,431 Accrued vacation 1,951 1,758 Accrued
customer rebates 1,994 1,963 Deposits from customers 6,163 5,540
Taxes on income 8,361 551 Other current liabilities and accrued
expenses 4,163 3,367 Current portion of long-term debt 523 522
Total current liabilities 115,229 125,725 Other non-current
liabilities 1,025 1,025 Long-term debt, less current portion 84,564
62,695 Shareholders' equity: Common stock 324 324 Additional paid
in capital 63,469 62,649 Retained earnings 81,027 66,246 Total
shareholders' equity 144,820 129,219 Total liabilities and
shareholders' equity $345,638 $318,664 Spartan Motors, Inc. and
Subsidiaries Sales and Other Financial Information by Business
Segment Quarter Ended March 31, 2008 Three Months Ended March 31,
2008 (amounts in thousands) Business Segments Chassis EVTeam Other
Consolidated Motorhome Chassis Sales 38,145 38,145 Fire Truck
Chassis Sales 29,737 (5,449) 24,288 EVTeam Product Sales 24,252
24,252 Other Product Sales 177,410 177,410 Total Net Sales 245,292
24,252 (5,449) 264,095 Interest Expense (Income) (51) 398 385 732
Depreciation Expense 589 281 457 1,327 Segment Net Earnings (Loss)
16,644 (436) (1,427) 14,781 Period End Backlog (amounts in
thousands) March 31, June 30, September December March 31, 2007
2007 30, 2007 31, 2007 2008 Motorhome Chassis * 37,679 23,768
26,097 27,312 17,465 Fire Truck Chassis * 84,416 72,097 67,071
60,374 70,720 Other Product * 53,178 131,801 228,803 199,362 99,153
Total Chassis 175,273 227,666 321,971 287,048 187,338 EVTeam
Product * 74,843 62,691 61,178 51,316 49,975 Total Backlog 250,116
290,357 383,149 338,364 237,313 * 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 DATASOURCE:
Spartan Motors, Inc. CONTACT: John Sztykiel, CEO, or Jim Knapp,
CFO, of Spartan Motors, Inc., +1-517-543-6400; Jeff Lambert or Ryan
McGrath, , of Lambert, Edwards & Associates, Inc.,
+1-616-233-0500 Web site: http://www.spartanmotors.com/
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