Spartan Motors Inc. Reports Q1 Sales Fall 19%
Spartan Motors Inc. today (April 26) announced operating results for the first quarter of 2011. Revenues were $95.1 million, down 19.1% compared to the same quarter of the prior year, which drove a net loss of $900,000, or 3 cents per diluted share, compared to breakeven results for the same period in 2010.
Highlights for the quarter include increased order intake and progress on key strategic initiatives, according to a news release.
Compared to the same quarter of 2010, the first quarter’s revenue and gross margin reflect a product mix shift from emergency response products, recreational vehicle chassis and aftermarket parts and assemblies (APA) to service and delivery vehicles. Results also reflect the impact of a softening emergency response market, partially offset by improvements in the service and delivery market.
Order intake climbed with a 42.7% sequential improvement over the fourth quarter of 2010, driven by service and delivery vehicle and emergency response chassis orders. This improvement is reflected in the consolidated backlog of $166.1 million, up 23.5% from year end.
Management remained focused on all four pillars of its operational plan during the quarter. The four-part operational plan comprised of offering compelling products, growing profitable market share, achieving and maintaining a strong balance sheet and effectively managing the company’s cost structure, is intended to ensure long-term profitable growth and alignment with shareholder interests.
Spartan noted what it called “Profitable Growth Opportunities and Compelling Products.” In this section, it cited the “execution of a multi-year supply agreement with Navistar Engine Group expanded the offering of clean diesel engine technology to include an advanced exhaust gas recirculation (EGR) option on a Spartan Chassis’ Gladiator. Spartan Chassis already offers a selective catalyst reduction (SCR) engine technology that meets the EPA’s 2010 engine emission standards.”
First quarter 2011 results:
- Net sales of $95.1 million (down 19.1% from Q1 2010).
- Gross margin of 13.6% of sales (down from 14.3% in Q1 2010).
- Operating expenses of $14.3 million (down $1.9 million from $16.2 million in Q1 2010).
- Net loss of $900,000 or 3 cents per share.
- Cash from continuing operations of $11.8 million (up $2.6 million from Q1 2010).
- Ending consolidated backlog of $166.1 million (up 23.5% from Q4 2010).
- Debt of $5.2 million.
- Cash balance of $25 million.
“We anticipated a tough environment in the first half of 2011, and while unhappy with the loss, we are moving forward and expect to be in a better position for the second half of 2011,” said said John Sztykiel, president and CEO of Spartan Motors. “We made progress in each area of our four-part operational plan during the quarter. Two parts were addressed with the recent acquisition of Classic Fire as it exemplifies our commitment to delivering compelling new products and growing profitable market share. This acquisition also demonstrates our commitment to the emergency response market as we expanded our emergency response line and added leadership talent to our bench.
“The growth of orders and the increase in backlog were driven by new orders for both service and delivery vehicles and fire truck chassis. These improvements are a result of Spartan’s revenue diversification and growth strategy, which includes growth through acquisitions, alliances and organic new product development,” he added.