CHARLOTTE, Mich., Nov. 5, 2015 /PRNewswire/ -- Spartan Motors,
Inc. (NASDAQ: SPAR) ("Spartan" or the "Company") today reported
operating results for the third quarter of 2015. The Company
posted a net loss of $5.8 million, or
($0.17) per share, on revenue of
$136.6 million versus net income of
$3.2 million, or $0.09 per share, on revenue of $144.2 million in the third quarter of
2014. Results for the third quarter of 2015 include non-cash,
pre-tax asset impairment charges of $2.2
million and a non-cash valuation allowance on deferred tax
assets of $3.2 million, plus
restructuring expenses of $0.5
million in the Emergency Response (ER) segment, compared to
$0.3 million in the third quarter of
2014.
Third Quarter 2015 Overview
For the third quarter of 2015 compared to the third quarter of
2014:
- Net sales of $136.6 million,
down 5.3% from $144.2
million
- Gross margin of 9.4% of sales versus
12.5%*
- Operating loss of $0.5 million
versus operating income of $4.3
million
- Adjusted operating income of $2.2
million excluding asset impairment and restructuring charges
versus $4.5 million
- Quarterly tax provision of $5.2
million includes $3.2 million
valuation allowance of deferred tax assets
- Net loss of $5.8 million, or
($0.17) per share, versus net income
of $3.2 million, or $0.09 per share
- Adjusted net loss of $0.1
million, or ($0.00) per share,
compared to adjusted net income of $3.4
million, or $0.10 per
share
- Order backlog increased to $275.3
million at September 30, 2015,
from $233.4 million at September 30, 2014
(*Cost of goods sold for both periods includes certain
engineering expenses that were previously classified as operating
expenses. There was no impact on operating income or net
income for either period.)
Daryl Adams, Spartan's Chief
Executive Officer, stated, "Spartan continues to focus on our
operational goals of implementing efficient manufacturing practices
and improving quality in order to deliver consistent, positive
financial performance. Delivery & Service Vehicle (DSV)
and Specialty Chassis & Vehicle (SCV) both reported revenue
growth, with DSV more than doubling operating income compared to
last year, while the Emergency Response (ER) business continues to
be challenging.
"A year ago, the company announced a multi-year strategic
restructuring plan for the ER segment. These efforts resulted
in operational improvement during the first half of 2015, but we
experienced production setbacks during the third quarter. As
a result, we have changed leadership and named John Slawson as President of Spartan Emergency
Response. His extensive ER industry expertise is an important
asset as we pursue our top priority of turning around the
performance of the ER business," said Adams.
Third Quarter 2015
Segment Results:
|
Delivery &
Service Vehicles (DSV)
|
(In
thousands)
|
|
Third
Quarter
|
|
|
|
2015
|
2014
|
%
Change
|
Delivery and
Service Vehicles
Revenue
|
|
Vehicles
|
|
$ 45,526
|
$ 44,739
|
1.8%
|
|
Aftermarket &
Service
|
8,711
|
7,730
|
12.7%
|
|
Total
revenue
|
$ 54,237
|
$ 52,469
|
3.4%
|
|
Operating income
(loss)
|
$ 4,064
|
$ 1,845
|
120.3%
|
|
- Total revenue increased to $54.2
million from $52.5 million in
the third quarter of 2014, driven primarily by higher aftermarket
parts and vehicle up-fit center sales. Favorable vehicle mix
yielded a modest increase in revenue, despite lower unit shipments
compared to the third quarter of 2014.
- Operating profit was $4.1 million
in the third quarter of 2015, more than doubling from $1.8 million a year ago. A favorable
product mix and higher aftermarket parts sales, plus better
material utilization and reductions in operating expenses, drove
higher operating income compared to the third quarter of 2014.
- The DSV segment's backlog at the end of the third quarter of
2015 stood at $107.7 million,
compared to $54.8 million at
September 30, 2014.
(In
thousands)
|
|
Third
Quarter
|
|
|
|
|
2015
|
2014
|
%
Change
|
Emergency
Response
|
|
|
|
|
Revenue
|
$ 42,030
|
$ 60,656
|
-30.7%
|
|
Operating income
(loss)
|
$ (5,991)
|
$ 1,658
|
NMF
|
|
|
|
|
|
|
- ER segment revenue decreased to $42.0
million from $60.7 million as
a result of a substantial decline in units shipped as compared to
the third quarter of 2014. Revenue in the third quarter of
2014 included approximately $14.0
million from the shipment of 46 units of a 70-unit order to
Peru.
- The ER segment posted an operating loss of $6.0 million in the third quarter, compared to
operating income of $1.7 million in
the prior year. Unfavorable product mix and lower unit
shipments accounted for $4.6 million
of the decrease in operating profit compared to the third quarter
of 2014. Other factors contributing to an operating loss in
the third quarter were non-cash asset impairment charges of
$2.2 million, restructuring expenses
of $0.5 million and $1.4 million in one-time service campaign and
warranty reserve accruals.
- Backlog decreased to $145.1
million at September 30, 2015,
compared to $156.0 million at
September 30, 2014.
Specialty
Chassis & Vehicles (SCV)
|
(In
thousands)
|
|
Third
Quarter
|
|
|
|
|
2015
|
2014
|
%
Change
|
Specialty Chassis
& Vehicles
Revenue
|
|
|
|
|
Motorhome
chassis
|
$ 32,367
|
$ 23,370
|
38.5%
|
|
Parts and
Assemblies
|
5,550
|
5,208
|
6.6%
|
|
Other Specialty
Vehicle
|
2,388
|
2,536
|
-5.8%
|
|
Total
revenue
|
$ 40,305
|
$ 31,114
|
29.5%
|
|
Operating income
(loss)
|
$ 2,776
|
$ 2,930
|
-5.3%
|
|
|
|
|
|
|
- The SCV segment reported revenue for the third quarter of
$40.3 million, an increase of 29.5
percent from $31.1 million in the
third quarter of 2014. Motorhome chassis sales increased to
$32.4 million from $23.4 million, due to higher unit shipments
year-over-year. Aftermarket Parts & Assemblies (APA)
sales rose to $5.6 million from
$5.2 million, while Other Specialty
Vehicle revenue declined to $2.4
million from $2.5 million due
to lower contract manufacturing activity compared to the third
quarter of 2014.
- Operating income decreased 5.3 percent to $2.8 million from $2.9
million a year ago due to $0.7
million in additional warranty accruals for a steering gear
bracket recall and a less favorable chassis mix, largely offset by
higher sales volume.
- Backlog at September 30, 2015,
totaled $22.5 million versus
$22.6 million at September 30, 2014.
Financial Summary and Outlook
Rick Sohm, Spartan's Chief
Financial Officer, commented, "DSV's operating income more than
doubled from last year's third quarter, and SCV's third quarter
operating income was flat with 2014, despite a $0.7 million warranty accrual recorded in the
third quarter of 2015. Still, consolidated operating results
for the third quarter of 2015 were disappointing, with the Company
reporting an operating loss of $0.5
million. Third quarter 2015 results included non-cash
asset impairment charges of $2.2
million, restructuring charges of $0.5 million and $2.1
million in one-time warranty accruals. Excluding the
asset impairment and restructuring charges, the Company's adjusted
operating income was $2.2 million.
We also recorded a non-cash valuation allowance on our
deferred tax assets of $3.2 million
that is included in our income tax provision of $5.2 million for the quarter and is a major
factor in our net loss of $5.8
million."
Sohm continued, "We expect both DSV and SCV to be profitable in
the fourth quarter but project operational challenges in ER to
result in a consolidated operating loss for the fourth quarter of
2015, as well as the full year. Our balance sheet at
September 30 remained strong, with
cash of $20.9 million. We
expect cash to be above this level at the end of 2015 as we work to
reduce accounts receivable and inventory balances during the fourth
quarter."
Daryl Adams concluded, "Our
priority is on turning around operations in the ER business.
With new leadership, we will work to return the ER business
to planned operating performance levels by the end of the year
while we support the profitable growth of our other two business
units, positioning the company for improved performance in
2016."
Reconciliation of Non-GAAP Financial Measures
This release contains adjusted operating income, adjusted net
income (loss) attributable to Spartan Motors and adjusted earnings
(loss) per share measures, which are all Non-GAAP financial
measures. These are calculated by excluding 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 expenses associated with restructuring actions
taken to improve the efficiency and profitability of certain of our
manufacturing operations, non-cash asset impairment charges and a
non-cash deferred tax asset valuation allowance. We present
these adjusted Non-GAAP measures because we consider them to be
important supplemental measures of our performance and believe them
to be useful to show ongoing results from operations distinct from
items that are infrequent or not indicative of our operating
performance.
The adjusted Non-GAAP measures are not measurements of our
financial performance under GAAP and should not be considered as an
alternative to operating income, net income (loss) attributable to
Spartan Motors or earnings (loss) per share under GAAP. These
adjusted Non-GAAP measures have limitations as analytical tools and
should not be considered in isolation or as a substitute for
analysis of our results as reported under GAAP. In addition, in
evaluating the adjusted Non-GAAP measures, you should be aware that
in the future we may incur expenses similar to the adjustments in
this presentation, despite our assessment that such expenses are
infrequent or not indicative of our operating performance.
Our presentation of the adjusted Non-GAAP measures should not be
construed as an inference 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 Non-GAAP measures only as a supplement.
The following table reconciles operating income (loss) to
adjusted operating income, net income (loss) attributable to
Spartan Motors to adjusted net income (loss) attributable to
Spartan Motors and earnings (loss) per share to adjusted earnings
(loss) per share for the periods indicated.
Financial Summary
(Non-GAAP)
|
(In thousands, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
2015
|
|
% of sales
|
|
2014
|
|
% of sales
|
|
Operating income
(loss)/Operating margin
|
|
$ (458)
|
|
-0.3%
|
|
$ 4,255
|
|
2.9%
|
|
Add back:
restructuring charges
|
|
462
|
|
0.3%
|
|
275
|
|
0.2%
|
|
Add back: asset
impairment
|
|
2,234
|
|
1.6%
|
|
-
|
|
0.0%
|
|
Adjusted operating
income (loss)/Adjusted operating margin
|
|
$ 2,238
|
|
1.6%
|
|
$ 4,530
|
|
3.1%
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Spartan Motors
|
|
$ (5,818)
|
|
-4.3%
|
|
$ 3,199
|
|
2.2%
|
|
Add back:
restructuring charges, net of tax
|
|
306
|
|
0.2%
|
|
221
|
|
0.2%
|
|
Add back: asset
impairment, net of tax
|
|
2,216
|
|
1.6%
|
|
-
|
|
0.0%
|
|
Add back:
deferred tax asset valuation allowance
|
|
3,151
|
|
2.3%
|
|
-
|
|
0.0%
|
|
Adjusted net income
(loss) attributable to Spartan Motors
|
|
$ (145)
|
|
-0.1%
|
|
$ 3,420
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
per share - basic and diluted
|
|
$ (0.17)
|
|
0.0%
|
|
$
0.09
|
|
0.0%
|
|
Add back:
restructuring charges, net of tax
|
|
0.01
|
|
0.0%
|
|
0.01
|
|
0.0%
|
|
Add back: asset
impairment, net of tax
|
|
0.07
|
|
0.0%
|
|
-
|
|
0.0%
|
|
Add back:
deferred tax asset valuation allowance
|
|
0.09
|
|
0.0%
|
|
-
|
|
0.0%
|
|
Adjusted net earnings
(loss) per share - diluted
|
|
$ (0.00)
|
|
0.0%
|
|
$ 0.10
|
|
0.0%
|
Conference Call, Webcast, Investor Presentation 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." To view the investor
presentation that accompanies this press release, please visit the
"Shareholders" section, then "Investor Presentations." 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 1,600
associates at facilities in Michigan, Pennsylvania, South
Dakota and Indiana. Spartan
reported sales of $507 million in
2014 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,
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
20,887
|
|
$
28,570
|
Accounts receivable,
less allowance of $130 and $144
|
68,521
|
|
48,362
|
Inventories
|
78,533
|
|
71,163
|
Deferred income tax
assets
|
4,658
|
|
7,799
|
Income taxes
receivable
|
-
|
|
1,696
|
Other current
assets
|
2,901
|
|
3,661
|
Total current
assets
|
175,500
|
|
161,251
|
|
|
|
|
Property, plant
and equipment, net
|
47,799
|
|
50,417
|
Goodwill
|
15,961
|
|
15,961
|
Intangible assets,
net
|
7,315
|
|
8,958
|
Other
assets
|
1,910
|
|
2,226
|
TOTAL
ASSETS
|
$ 248,485
|
|
$ 238,813
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
38,923
|
|
$
22,762
|
Accrued
warranty
|
11,239
|
|
9,237
|
Accrued customer
rebates
|
3,533
|
|
2,166
|
Accrued compensation
and related taxes
|
9,183
|
|
8,226
|
Deposits from
customers
|
11,045
|
|
11,524
|
Other current
liabilities and accrued expenses
|
5,363
|
|
6,646
|
Current portion of
long-term debt
|
62
|
|
59
|
Total current
liabilities
|
79,348
|
|
60,620
|
|
|
|
|
Other non-current
liabilities
|
1,984
|
|
2,365
|
Long-term debt,
less current portion
|
5,155
|
|
5,202
|
Deferred income
tax liabilities
|
2,018
|
|
2,008
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred stock, no
par value: 2,000 shares authorized (none issued)
|
-
|
|
-
|
Common stock, $0.01
par value; 40,000 shares authorized; 34,275 and 34,094
outstanding
|
343
|
|
341
|
Additional paid in
capital
|
76,307
|
|
75,695
|
Retained
earnings
|
83,489
|
|
92,724
|
Total Spartan
Motors, Inc. shareholders' equity
|
160,139
|
|
168,760
|
Non-controlling
interest
|
(159)
|
|
(142)
|
Total shareholders'
equity
|
159,980
|
|
168,618
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$ 248,485
|
|
$ 238,813
|
|
|
|
|
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,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Sales
|
$ 136,572
|
|
$ 144,239
|
|
$ 409,767
|
|
$ 387,993
|
Cost of products
sold
|
123,755
|
|
126,148
|
|
367,520
|
|
346,217
|
Restructuring
charges
|
9
|
|
-
|
|
464
|
|
-
|
Gross
profit
|
12,808
|
|
18,091
|
|
41,783
|
|
41,776
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
454
|
|
898
|
|
3,087
|
|
2,762
|
Selling, general and
administrative
|
12,359
|
|
12,663
|
|
39,202
|
|
37,983
|
Restructuring
charge
|
453
|
|
275
|
|
1,965
|
|
275
|
Total operating
expenses
|
13,266
|
|
13,836
|
|
44,254
|
|
41,020
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(458)
|
|
4,255
|
|
(2,471)
|
|
756
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(91)
|
|
(80)
|
|
(293)
|
|
(265)
|
Interest and other
income
|
(36)
|
|
13
|
|
121
|
|
252
|
Total other income
(expense)
|
(127)
|
|
(67)
|
|
(171)
|
|
(13)
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes
|
(585)
|
|
4,188
|
|
(2,643)
|
|
743
|
|
|
|
|
|
|
|
|
Taxes
|
5,234
|
|
1,009
|
|
4,896
|
|
(537)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(5,819)
|
|
3,179
|
|
(7,539)
|
|
1,280
|
|
|
|
|
|
|
|
|
Less: net loss
attributable to non-controlling interest
|
(1)
|
|
(8)
|
|
(17)
|
|
(26)
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Spartan Motors Inc.
|
$
(5,818)
|
|
$
3,199
|
|
$ (7,522)
|
|
$ 1,306
|
|
|
|
|
|
|
|
|
Basic net earnings
(loss) per share
|
$ (
0.17)
|
|
$
0.09
|
|
$ (0.22)
|
|
$ 0.04
|
|
|
|
|
|
|
|
|
Diluted net
earnings (loss) per share
|
$ (
0.17)
|
|
$
0.09
|
|
$ (0.22)
|
|
$ 0.04
|
|
|
|
|
|
|
|
|
Basic weighted
average common shares outstanding
|
33,885
|
|
34,246
|
|
33,806
|
|
34,303
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
33,885
|
|
34,249
|
|
33,806
|
|
34,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spartan Motors,
Inc. and Subsidiaries
|
Sales and Other
Financial Information by Business Segment
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2015 (in thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business
Segments
|
|
|
|
|
|
|
Emergency
Response
|
|
Delivery &
Service Vehicles
|
|
Specialty Chassis
& Vehicles
|
|
Other
|
|
Consolidated
|
Emergency Response
Vehicle Sales
|
$ 42,030
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$ 42,030
|
Utilimaster Vehicle
Sales
|
-
|
|
45,526
|
|
-
|
|
-
|
|
45,526
|
Motorhome Chassis
Sales
|
-
|
|
-
|
|
32,367
|
|
-
|
|
32,367
|
Other Specialty
Vehicles
|
-
|
|
-
|
|
2,388
|
|
-
|
|
2,388
|
Aftermarket Parts and
Assemblies
|
-
|
|
8,711
|
|
5,550
|
|
-
|
|
14,261
|
Total
Sales
|
|
$ 42,030
|
|
$ 54,237
|
|
$ 40,305
|
|
$ -
|
|
$ 136,572
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
Amortization Expense
|
$
263
|
|
$ 928
|
|
$ 105
|
|
$ 576
|
|
$
1,872
|
Operating Income
(Loss)
|
(5,991)
|
|
4,064
|
|
2,776
|
|
(1,307)
|
|
(458)
|
Segment
Assets
|
|
70,011
|
|
83,945
|
|
23,820
|
|
70,709
|
|
248,485
|
|
|
|
|
|
|
|
|
|
|
|
|
Spartan Motors,
Inc. and Subsidiaries
|
|
Sales and Other
Financial Information by Business Segment
|
|
Unaudited
|
|
Period End Backlog
(amounts in thousands of dollars)
|
|
|
Sept. 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
Dec. 31,
2014
|
|
Sept. 30,
2014
|
|
Emergency Response
Vehicles*
|
$145,104
|
|
$148,762
|
|
$157,486
|
|
$160,743
|
|
$155,968
|
|
|
|
|
|
|
|
|
|
|
|
|
Delivery &
Service Vehicles Backlog *
|
107,671
|
|
88,526
|
|
87,485
|
|
60,630
|
|
54,789
|
|
|
|
|
|
|
|
|
|
|
|
|
Motorhome Chassis
*
|
21,776
|
|
23,196
|
|
13,980
|
|
16,436
|
|
20,972
|
|
Other
Vehicles*
|
-
|
|
-
|
|
3,268
|
|
3,994
|
|
-
|
|
Aftermarket Parts and
Assemblies
|
783
|
|
2,194
|
|
1,830
|
|
1,932
|
|
1,676
|
|
Total Specialty
Chassis & Vehicles Backlog
|
22,559
|
|
25,390
|
|
19,078
|
|
22,362
|
|
22,648
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Backlog
|
$275,334
|
|
$262,678
|
|
$264,049
|
|
$243,735
|
|
$233,405
|
|
|
|
|
|
|
|
|
|
|
|
|
* Anticipated time to
fill backlog orders at September 30, 2015; 13 months or less for
emergency response vehicles; 3 months or less for motorhome
chassis; 5 months or less for delivery and service vehicles; and 1
month or less for other products.
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/spartan-motors-reports-third-quarter-2015-results-300172932.html
SOURCE Spartan Motors, Inc.