CHARLOTTE, Mich., Oct. 30,
2014 /PRNewswire/ -- Spartan Motors, Inc. (NASDAQ: SPAR)
("Spartan" or the "Company") announced net income of $3.2 million, or $0.09 per share, in the quarter ended
September 30, 2014. In the
third quarter of 2013, Spartan reported net income of $0.6 million, or $0.02 per share. For the first nine months
of 2014, Spartan reported net income of $1.3
million, or $0.04 per share,
compared to a loss of $3.0 million,
or ($0.09) per share.
"Spartan's continuing focus on operational improvement and
executing our DRIVE strategy resulted in solid performance in the
third quarter. All three segments were profitable and
reported higher operating income compared to the third quarter of
2013," stated John Sztykiel,
Spartan's Chief Executive Officer.
Third Quarter 2014 Overview
For the third quarter of 2014 compared to the third quarter of
2013, Spartan reported:
- Net sales of $144.2 million,
up 14.4% from $126.1 million
- Gross margin of 14.0% of sales versus 12.8%
- Operating income of $4.3
million versus $1.8
million
- Delivery & Service (DSV) operating profit of
$1.8 million versus operating profit
of $1.3 million
- Emergency Response (ER) operating profit of $1.7 million versus operating profit of
$0.7 million
- Specialty Chassis & Vehicles (SCV) operating profit of
$2.9 million compared to operating
profit of $1.6 million
- Cash balance of $28.5 million
at September 30, 2014, compared to
$30.7 million at December 31, 2013
- New order intake totaled $130.5
million compared to $121.0
million, up 7.9%
- Order backlog decreased to $233.4
million at September 30, 2014,
from $242.7 million at December 31, 2013
- Repurchased $1 million of
Spartan common stock during the third quarter 2014
Sztykiel continued his remarks, stating, "The Charlotte campus was a major contributor with
most of the Peru fire truck order
being produced and shipped during the third quarter, helping to
return the ER segment to profitability. The SCV segment was
also a strong performer during the third quarter, reporting higher
revenue and operating profit, while DSV's greater operating
efficiency and favorable product mix resulted in higher operating
profit despite a small decline in revenue."
Third Quarter 2014 Segment
Results:
Delivery & Service Vehicles (DSV)
(In
thousands)
|
|
Third
Quarter
|
|
|
|
|
2014
|
2013
|
%
Change
|
Delivery and
Service Vehicles
Revenue
|
|
|
|
Vehicles
|
|
$ 44,739
|
$ 49,453
|
-9.5%
|
|
Aftermarket &
Service
|
7,730
|
5,476
|
41.2%
|
|
Total
revenue
|
$ 52,469
|
$ 54,929
|
-4.5%
|
|
Operating
income
|
$ 1,845
|
$ 1,276
|
44.6%
|
|
|
|
|
|
|
|
- Vehicle sales declined by $4.7
million from the prior year to $44.7
million due to lower unit shipments, partially offset by a
more favorable product mix and pricing on the Reach. Units
shipped during the third quarter of 2014 totaled 2,213 versus 2,451
a year ago.
- Aftermarket parts and field service solutions revenue increased
41.2% to $7.7 million in the third
quarter of 2014. Revenue increased on generally higher sales
of aftermarket parts and services, combined with a contribution of
$0.9 million from the Saltillo, Mexico up-fit
facility.
- Operating profit for the third quarter of 2014 was $1.8 million versus $1.3
million. Greater profitability for the quarter was due to a
more favorable product mix and Reach
pricing.
- During the third quarter, DSV received an order from a new
customer for 665 walk-in vans to be produced in 2015. Backlog
at September 30, 2014, totaled
$54.8 million, compared to
$73.1 million at December 31, 2013, which included $24.6 million in Reach
orders.
Emergency Response (ER)
(In
thousands)
|
|
Third
Quarter
|
|
|
|
|
2014
|
2013
|
%
Change
|
Emergency
Response
Revenue
|
|
|
|
|
Total
revenue
|
$ 60,656
|
$ 42,902
|
41.4%
|
|
Operating
income
|
$ 1,658
|
$ 726
|
128.4%
|
|
|
|
|
|
|
- ER revenue totaled $60.7 million
in the third quarter, an increase of 41.4% from the prior-year
period. Revenue growth was due to an increase in units
shipped – 216 versus 156. The third quarter of 2014 included
the shipment of 46 fire trucks to Peru. Through September 30, 2014, Spartan ER has delivered 56
of the 70-truck Peru order, with
the remaining 14 trucks scheduled to ship early in the fourth
quarter of this year.
- The ER segment posted operating income of $1.7 million in the third quarter of 2014
compared to operating income of $0.7
million. The increase in operating income was
primarily due to higher volume, including the shipment of 46 trucks
for Peru, plus a positive
contribution from lower labor and overhead as a percentage of
sales. Operating income for the third quarter of 2014
included restructuring expenses of $0.3
million to upgrade processes in the ER business.
- Backlog at September 30, 2014,
was $156.0 million compared to
$156.5 million at December 31, 2013.
Sztykiel commented on the ER segment, "Third quarter results in
the ER segment demonstrate the ability of the Charlotte campus to deliver an outstanding
product with a high level of quality and superior
profitability. Charlotte's
performance during the quarter is confirmation of our decision to
increase fire truck production at this facility as we improve the
operating performance of our ER business.
"Operating performance at Brandon continued to improve during the
quarter. As we devote more resources and invest in our
Brandon and Ephrata facilities, we
expect to make further progress toward upgrading our operational
capabilities in the fourth quarter and 2015. We are moving
the ER business in the right direction and expect to realize better
operating results going forward as we execute DRIVE."
Specialty Chassis & Vehicles (SCV)
(In
thousands)
|
|
Third
Quarter
|
|
|
|
|
2014
|
2013
|
%
Change
|
Specialty Chassis
& Vehicles
Revenue
|
|
|
|
|
Motorhome &
Bus
|
$ 23,370
|
$ 21,126
|
10.6%
|
|
Parts and
Accessories
|
5,208
|
5,348
|
-2.6%
|
|
Other Specialty
Vehicle
|
2,536
|
1,769
|
43.4%
|
|
Total
revenue
|
$ 31,114
|
$ 28,243
|
10.2%
|
|
Operating
income
|
$ 2,930
|
$ 1,613
|
81.6%
|
|
|
|
|
|
|
- SCV segment revenue increased 10.2% to $31.1 million from $28.2
million due to sales growth in the motorhome and bus chassis
and Isuzu contract manufacturing operations. Motorhome
chassis revenue increased to $23.4
million from $21.1 million as
a more favorable product mix of higher-content chassis more than
offset a slight reduction in units produced – 218 versus 225
chassis. In addition to higher motorhome and bus chassis
revenue, customer orders for motorhome chassis increased during the
third quarter of 2014, indicating RV manufacturers have reduced
their finished goods inventories. Other Specialty Vehicle
revenues increased 43.4% to $2.5
million due to higher Isuzu contract manufacturing
activity.
- Operating income increased to $2.9
million from $1.6 million, up
81.6% in the third quarter of 2014. Growth in operating
income resulted from higher revenue, a more favorable mix in
motorhome and bus chassis operations, and higher production of
Isuzu trucks.
- Backlog at September 30, 2014,
totaled $22.6 million versus
$13.0 million at December 31, 2013.
Financial Summary and Outlook
"Spartan's third quarter performance reflected the impact of
successfully executing our DRIVE strategy and favorable order
timing. All three of our segments were profitable for the
quarter and posted positive operating profit comparisons to the
third quarter of 2013. Notably, the DSV segment reported
higher operating profit on lower revenue due to some favorable mix
but also due to the investment we made in the Bristol facility in
2013, and efforts to enhance operational efficiency," stated
Lori Wade, Spartan's Chief Financial
Officer. "In the third quarter of 2014, Spartan's gross
margin reached 14.0% compared to 12.8% a year ago. Operating
income in the third quarter totaled $4.3
million, or 3.0% of sales, including restructuring expenses
of $0.3 million. This
performance compared favorably with the third quarter of 2013 when
Spartan posted operating income of $1.8
million, or 1.4% of sales.
"Cash at September 30, 2014, was
$28.5 million, compared to
$29.7 million at June 30.
During the third quarter, we repurchased another $1 million of Spartan stock. Inventory
declined by $10.7 million as we
completed and shipped a total of 46 fire trucks being built for
Peru. Accounts receivable increased a similar amount as these
trucks were shipped and invoiced during the quarter. We
completed and shipped the remaining 14 units for Peru in October and expect to collect the
remaining receivables during the fourth quarter, resulting in a
higher cash balance at the end of 2014."
Wade continued her remarks, stating, "We continue to project
2014 revenue of $500 – $520 million. Revenue in the fourth quarter is
likely to be below fourth-quarter 2013 levels due to seasonal
volatility that affected order timing and the lack of Reach™
production for the remainder of this year. As we stated in
our most recent press release, we anticipate a pre-tax charge of
approximately $2.4 million in the
fourth quarter, related to the closure of the Ocala facility and
upgrading processes at the Brandon
and Ephrata locations. Including the impact of the charge and
lower revenue, we expect to report an operating loss of
approximately $2.4 million in the
fourth quarter of 2014.
"Looking forward to 2015, we expect revenue growth in the
mid-single digits and to make additional progress in our
operational improvement initiatives. We expect to invest
approximately $5 million in the ER
segment, with most of that spending occurring in 2015. For
the year, we expect 2015 to result in higher revenue and operating
income, including the impact of incremental spending and investment
in the ER segment. We expect to provide more details when we
report fourth-quarter 2014 results."
Summary
Sztykiel commented, "Spartan reported solid results for the
third quarter as we executed our DRIVE strategy. All three
business segments were profitable and posted higher operating
income versus the prior year. In 2014, Spartan's performance
has improved sequentially each quarter. However, one of our
remaining challenges is to overcome the seasonality of our
business, especially the first and fourth quarters of each
year. We are making progress on this front, but seasonality
will remain a challenge for Spartan for the foreseeable future.
"To close, we had a solid third quarter and ended with a strong
balance sheet. We repurchased another $1 million of common stock in the quarter and
just announced a $0.05 per share
dividend to be paid in the fourth quarter. Alignment and
execution around DRIVE is delivering results and moving us forward
with confidence as we approach 2015."
D.R.I.V.E. is Spartan's operating strategy based on five
tenets:
- Diversified Growth
- Redefining Technology and Innovation
- Integrated Operational Excellence
- Vibrant Culture
- Excited Consumers/Brand Loyalists
Conference Call, Webcast and Investor
Information
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
www.spartanmotors.com, click on "Shareholders," and then on
"Webcasts." For more information about Spartan, please visit
www.spartanmotors.com.
About Spartan Motors
Spartan Motors, Inc. designs, engineers and manufactures
specialty chassis, specialty vehicles, truck bodies and aftermarket
parts for the recreational vehicle (RV), emergency response,
government services, defense, and delivery and service markets. The
Company's brand names – Spartan™, Spartan Chassis™, Spartan ER™,
Spartan ERV™ and Utilimaster® - are known for quality, performance,
service and first-to-market innovation. The Company employs
approximately 1,700 associates at facilities in Michigan, Pennsylvania, South
Dakota, Indiana and
Florida. Spartan reported sales of
$470 million in 2013 and is focused
on becoming a global leader in the design, engineering and
manufacture of specialty vehicles and chassis. Visit Spartan Motors
at www.spartanmotors.com.
This release contains several forward-looking statements that
are not historical facts, including statements concerning our
business, strategic position, financial projections, financial
strength, future plans, objectives, and the performance of our
products and operations. These statements can be identified by
words such as "believe," "expect," "intend," "potential," "future,"
"may," "will," "should," and similar expressions regarding future
expectations. These forward-looking statements involve
various known and unknown risks, uncertainties, and
assumptions that are difficult to predict with regard to
timing, extent, and likelihood. Therefore, actual performance
and results may materially differ from what may be expressed or
forecasted in such forward-looking statements. Factors that
could contribute to these differences include operational and other
complications that may arise affecting the implementation of our
plans and business objectives; continued pressures caused by
economic conditions and the pace and extent of the economic
recovery; challenges that may arise in connection with the
integration of new businesses or assets we acquire or the
disposition of assets; restructuring of our operations, and/or our
expansion into new geographic markets; issues unique to government
contracting, such as competitive bidding processes, qualification
requirements, and delays or changes in funding; disruptions within
our dealer network; changes in our relationships with major
customers, suppliers, or other business partners, including Isuzu;
changes in the demand or supply of products within our markets or
raw materials needed to manufacture those products; and changes in
laws and regulations affecting our business. Other
factors that could affect outcomes are set forth in our Annual
Report on Form 10-K and other filings we make with the Securities
and Exchange Commission (SEC), which are available at
www.sec.gov or our website. All forward-looking
statements in this release are qualified by this paragraph.
Investors should not place undue reliance on forward-looking
statements as a prediction of actual results. We undertake no
obligation to publicly update or revise any forward-looking
statements in this release, whether as a result of new information,
future events, or otherwise.
Spartan Motors,
Inc. and Subsidiaries
|
Consolidated
Balance Sheets
|
(In thousands,
except par value)
|
|
|
(Unaudited)
|
|
|
|
September
30,
|
|
December
31,
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
28,479
|
|
$
30,707
|
Accounts receivable,
less allowance of $193 and $769
|
59,432
|
|
47,560
|
Inventories
|
73,702
|
|
81,419
|
Deferred income tax
assets
|
6,824
|
|
6,736
|
Income taxes
receivable
|
1,973
|
|
1,641
|
Assets held for
sale
|
-
|
|
373
|
Other current
assets
|
2,073
|
|
2,291
|
Total current
assets
|
172,483
|
|
170,727
|
|
|
|
|
Property, plant
and equipment, net
|
51,070
|
|
54,278
|
Goodwill
|
15,961
|
|
15,961
|
Intangible assets,
net
|
9,242
|
|
10,094
|
Other
assets
|
2,127
|
|
2,222
|
TOTAL
ASSETS
|
$
250,883
|
|
$ 253,282
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
29,216
|
|
$
30,525
|
Accrued
warranty
|
9,488
|
|
7,579
|
Accrued customer
rebates
|
3,402
|
|
2,190
|
Accrued compensation
and related taxes
|
8,676
|
|
6,440
|
Deposits from
customers
|
13,212
|
|
18,006
|
Other current
liabilities and accrued expenses
|
5,959
|
|
5,333
|
Current portion of
long-term debt
|
59
|
|
79
|
Total current
liabilities
|
70,012
|
|
70,152
|
|
|
|
|
Other non-current
liabilities
|
2,232
|
|
3,109
|
Long-term debt,
less current portion
|
5,217
|
|
5,261
|
Deferred income
tax liabilities
|
3,209
|
|
3,209
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred stock, no
par value: 2,000 shares authorized (none issued)
|
-
|
|
-
|
Common stock, $0.01
par value; 40,000 shares authorized; 34,097 and 34,210
outstanding
|
341
|
|
342
|
Additional paid in
capital
|
75,334
|
|
75,075
|
Retained
earnings
|
94,562
|
|
96,132
|
Total Spartan
Motors, Inc. shareholders' equity
|
170,237
|
|
171,549
|
Non-controlling
interest
|
(24)
|
|
2
|
Total shareholders'
equity
|
170,213
|
|
171,551
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
250,883
|
|
$ 253,282
|
|
|
|
|
Spartan Motors,
Inc. and Subsidiaries
|
Consolidated
Statements of Operations
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Sales
|
$ 144,239
|
|
$ 126,074
|
|
$ 387,993
|
|
$ 343,084
|
Cost of products
sold
|
124,077
|
|
109,943
|
|
340,423
|
|
304,981
|
Gross
profit
|
20,162
|
|
16,131
|
|
47,570
|
|
38,103
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
2,957
|
|
2,726
|
|
8,556
|
|
8,424
|
Selling, general and
administrative
|
12,663
|
|
11,593
|
|
37,983
|
|
33,628
|
Restructuring
|
275
|
|
-
|
|
275
|
|
-
|
Total operating
expenses
|
15,895
|
|
14,319
|
|
46,814
|
|
42,052
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
4,267
|
|
1,812
|
|
756
|
|
(3,949)
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(80)
|
|
(79)
|
|
(265)
|
|
(235)
|
Interest and other
income
|
13
|
|
173
|
|
252
|
|
433
|
Total other income
(expense)
|
(67)
|
|
94
|
|
(13)
|
|
198
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes
|
4,200
|
|
1,906
|
|
743
|
|
(3,751)
|
|
|
|
|
|
|
|
|
Taxes
|
1,009
|
|
1,343
|
|
(537)
|
|
(750)
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
3,191
|
|
563
|
|
1,280
|
|
(3,001)
|
|
|
|
|
|
|
|
|
Less: net loss
attributable to non-controlling interest
|
(8)
|
|
-
|
|
(26)
|
|
-
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Spartan Motors Inc.
|
$
3,199
|
|
$
563
|
|
$ 1,306
|
|
$ (3,001)
|
|
|
|
|
|
|
|
|
Basic net earnings
(loss) per share
|
$
0.09
|
|
$
0.02
|
|
$ 0.04
|
|
$ (0.09)
|
|
|
|
|
|
|
|
|
Diluted net
earnings (loss) per share
|
$
0.09
|
|
$
0.02
|
|
$ 0.04
|
|
$ (0.09)
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
34,246
|
|
34,133
|
|
34,303
|
|
33,502
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
34,249
|
|
34,182
|
|
34,309
|
|
33,502
|
|
|
|
|
|
|
|
|
Spartan Motors,
Inc. and Subsidiaries
|
Sales and Other
Financial Information by Business Segment
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014 (amounts in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Business
Segments
|
|
|
|
|
|
Emergency
Response
|
|
Delivery &
Service Vehicles
|
|
Specialty
Vehicles
|
|
Other
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
Emergency Response
Vehicles Sales
|
$ 60,656
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$ 60,656
|
Delivery &
Service Vehicles Sales
|
-
|
|
44,739
|
|
-
|
|
-
|
|
44,739
|
Motorhome Chassis
Sales
|
-
|
|
-
|
|
23,370
|
|
-
|
|
23,370
|
Other Specialty
Vehicles
|
-
|
|
-
|
|
2,536
|
|
-
|
|
2,536
|
Aftermarket Parts and
Assemblies
|
-
|
|
7,730
|
|
5,208
|
|
-
|
|
12,938
|
|
|
|
|
|
|
|
|
|
|
Total
Sales
|
$ 60,656
|
|
$ 52,469
|
|
$ 31,114
|
|
$
-
|
|
$ 144,239
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization Expense
|
$
282
|
|
$ 1,121
|
|
$
94
|
|
$
609
|
|
$ 2,106
|
Operating Income
(Loss)
|
$ 1,658
|
|
$ 1,845
|
|
$ 2,930
|
|
$ (2,166)
|
|
$ 4,267
|
Segment
Assets
|
$ 86,856
|
|
$ 69,806
|
|
$ 22,982
|
|
$ 71,239
|
|
$ 250,883
|
Spartan Motors,
Inc. and Subsidiaries
|
Sales and Other
Financial Information by Business Segment
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Period End Backlog
(amounts in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Sept 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
|
Dec. 31,
2013
|
|
Sept. 30,
2013
|
|
|
|
|
|
|
|
|
|
|
Emergency Response
Vehicles *
|
$ 155,968
|
|
$ 165,144
|
|
$ 176,350
|
|
$ 156,489
|
|
$ 119,693
|
|
|
|
|
|
|
|
|
|
|
Delivery &
Service Vehicles *
|
54,789
|
|
62,994
|
|
83,356
|
|
73,148
|
|
87,492
|
|
|
|
|
|
|
|
|
|
|
Motorhome Chassis
*
|
20,972
|
|
15,761
|
|
12,866
|
|
11,370
|
|
22,104
|
Other
Vehicles*
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Aftermarket Parts and
Assemblies
|
1,676
|
|
2,803
|
|
1,438
|
|
1,654
|
|
2,635
|
Total Specialty
Vehicles Backlog
|
22,648
|
|
18,564
|
|
14,304
|
|
13,024
|
|
24,739
|
|
|
|
|
|
|
|
|
|
|
Total
Backlog
|
$ 233,405
|
|
$ 246,702
|
|
$ 274,010
|
|
$ 242,661
|
|
$ 231,924
|
|
|
|
|
|
|
|
|
|
|
* Anticipated time to
fill backlog orders at September 30, 2014; 7 months or less for
emergency response vehicles; 3 months or less for motorhome
chassis; 3 months or less for delivery and service vehicles.
Backlog at September 30, 2014 includes the bodies, but not the
chassis, for a fleet order for 665 walk-in vans that we received in
late September. We have not yet determined whether we will
recognize the sale price of these chassis as revenue. If so
determined, the chassis for these walk-in vans would add
approximately $13.6 million to our backlog at September 30,
2014.
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Spartan Motors, Inc.