Spartan Reports 2Q Loss, Details Realignment
Charlotte, Mich.-based Spartan Motors Inc. today (July 26) announced operating results for its second quarter, reflecting actions taken to realign operations in response to the softened defense and motorhome markets, with continued investment in its emergency response and delivery and service markets.
Revenues were $99.4 million, down 14.1% compared to the same quarter of the prior year, driven by the overall economic climate and government budgetary constraints. Also contributing to the relative decline were increased prior year sales volumes related to emergency response orders placed in advance of the 2010 engine emissions change. These factors, combined with restructuring charges of $2.8 million and a product mix shift away from more profitable defense and service parts sales, resulted in a net loss of $2.2 million, or $0.07 per diluted share. The realignment is expected to reduce Spartan’s fixed costs by approximately $4.0 million on an annual basis. Exclusive of the one-time restructuring charges, adjusted net loss from continuing operations was $0.4 million, or $0.01 per diluted share.
Consolidated backlog improved 8% to $179.3 million over the first quarter of 2011, driven by order intake momentum in the delivery and service vehicle and emergency response chassis markets.
Second quarter highlights include:
• Net sales of $99.4 million (down 14.1% from Q2 2010)
• Adjusted gross margin of 14.6 percent of sales (down from 15.1% in Q2 2010)
• Adjusted operating expense of $15.3 million (down $0.2 million compared to Q2 2010)
• Restructuring charges of $1.8 million, net of tax, or $0.06 per diluted share
• Net loss of $2.2 million ($0.07 per diluted share), or adjusted net loss of $0.4 million ($0.01 per diluted share) before restructuring charges
• Cash from continuing operations of $8.4 million
• Ending consolidated backlog of $179.3 million (up 8% from Q1 2011)
• Total debt of $5.2 million
• Cash balance of $30.6 million (up $16.1 million from Q4 2010)
“While we anticipated another tough quarter, it was still a difficult experience,” said John Sztykiel, president and CEO of Spartan Motors. “The restructuring costs were not easy, but they were necessary to resize our cost structure and position us for future growth and profitability. The motorhome market continues to be soft, and defense orders have been curtailed significantly in response to government budgetary cuts. However, the emergency response market, while down compared to 2010, is showing improvement, with better-than-expected order intake resulting in a stepped-up production schedule for the second half of 2011. Our delivery and service vehicle market continued its momentum with a 73% sales improvement and nearly double the backlog compared to the same quarter in 2010. We are very excited about the opportunity in this market and pleased with its contribution to our diversified product portfolio.
“Clearly, we still have challenges in some of our markets and must continue to reduce our cost of doing business. The good news is that our backlog has been up for two consecutive quarters, and we expect the second half of 2011 to be better than the first.”
To view the entire report click here.