CHARLOTTE, Mich., June 25, 2012 /PRNewswire/ -- Spartan
Motors, Inc. (NASDAQ: SPAR) ("Spartan" or the "Company") today
updated the product launch status of its revolutionary Reach
delivery vehicle. Demand with major fleets continues to be
positive, as one of the world's largest parcel delivery companies
announced an order for 150 new vehicles. The move of Reach
manufacturing to the Charlotte,
Michigan, campus is underway and on track to be completed in
the third quarter of this year.
Spartan's Utilimaster subsidiary is currently addressing
fit-and-finish quality and appearance issues on approximately 170
vehicles. The Company expects to ship the majority of these
vehicles to customers or dealers during July and August. For the
second quarter of 2012, Spartan does not expect to ship Reach
vehicles to customers as the Company addresses the fit-and-finish
issues. Spartan expects full-year 2012 shipments of 500 to 1,000
Reach vehicles.
Spartan Receives Order for 150 More Reach Vans from Major
Fleet Customer
Spartan announced its Utilimaster subsidiary has received a new
order for an additional 150 Reach vehicles from one of the world's
largest delivery service companies. Our customer evaluated
the performance of the Reach for a year under a variety of climatic
and operating conditions. The Reach offers several advantages over
a traditional walk-in van, including greater maneuverability,
improved ingress and egress, nearly 1,000 lbs. lower weight and
significantly lower fuel consumption through the use of advanced,
lightweight composites/recycled materials, all combined with great
looks. These units will be delivered during the second half
of 2012.
Spartan's Chief Executive Officer, John
E. Sztykiel, stated, "The attractive value proposition
offered by the Reach is highlighted by this order. This represents
an important milestone as we work to realize the long-term
opportunities for Reach. As we have demonstrated with the
Reach, it is possible to achieve improved vehicle performance while
meeting a number of green/sustainability goals."
New Reach Production Location and
Leadership
Spartan is currently transferring production of the Reach from
Utilimaster's Wakarusa, Indiana
facility to Spartan's Charlotte,
Michigan campus, as previously announced. This process
began during June as production ended at the Wakarusa facility. Spartan is currently
setting up a dedicated production facility at the Charlotte campus. "The move to
Charlotte has always been a part
of the Reach business plan, as any product involving Isuzu will be
centered in Charlotte. Our N-Series chassis alliance with
Isuzu in Charlotte has produced up
to 21 chassis per day with 49 people, which is a great
metric. We expect to realize that same success with the
Reach," said Sztykiel.
Spartan has also selected Frank
Faga, an automotive executive with extensive experience in
new product launches and production, as program manager. Mr.
Faga has previously served in senior product development and
production roles for automakers including Fisker, Chrysler and
Daimler-Benz. He will lead a team assigned to implement these
changes and bring the Reach to full production status at the
Charlotte
facility.
Production Ramp Up Slows in 2012
Mr. Sztykiel commented on the Reach ramp-up, stating, "The
launch of the Reach has been a more difficult and time-consuming
process than we would have preferred. Encountering a few
delays and cost issues requiring resolution is not surprising since
the Reach is an all-new, transformational delivery vehicle
utilizing advanced composite materials and new manufacturing
processes. As is often the case with game-changing new
products, we have encountered some challenges to overcome as we
bring the Reach into the marketplace and believe it is appropriate
to slow the production ramp-up. But all problems have
identifiable solutions. Those solutions are being put into
effect now and the customer's delivery requirements will be
met. We are focused on ensuring we have a great-looking,
performance-oriented product to drive growth in sales in 2013 and
beyond."
2012 Financial Expectations Unchanged
Despite Reach challenges, the Company reaffirmed its previously
disclosed expectations for 2012 financial performance.
Management has previously stated it expects full-year 2012 revenue
growth in mid-single digits over 2011 levels, with a gross margin
in the 15 – 15.5% range and operating expenses of 12 – 12.5% of
revenue. Both the gross margin and operating expense
expectations are from continuing operations, excluding
restructuring or expenses from Utilimaster's relocation to
Bristol, Indiana. For the
year, Spartan expects to deliver approximately 500 – 1,000 Reach
vehicles. For 2013, the Company expects production of the
Reach to be approximately double the number of 2012 shipments.
Management expects to provide further details on the production
ramp of the Reach in its Second Quarter 2012 earnings release and
conference call, scheduled to be held in early August.
About Spartan Motors
Spartan Motors, Inc. designs, engineers and manufactures
specialty chassis, specialty vehicles, truck bodies and aftermarket
parts for the recreational vehicle, emergency response, government
services, defense, and delivery and service markets. The company's
brand names – Spartan™, 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, Indiana,
Florida and Texas. Spartan reported sales of $426 million in 2011 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 strength, future plans,
objectives, and the performance of our products. 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; 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.
SOURCE Spartan Motors, Inc.