Charlotte, Mich.-based Spartan Motors Inc. today (May 1) reported a 25% increase in revenue for its first quarter while the company incurred a net loss, primarily due to restructuring costs from its Utilimaster Corp. subsidiary.
Revenue during the period totaled $118.8 million, an increase of 25% from $95.1 million in the first quarter of 2011. Revenue growth was led by the delivery and service vehicles segment, which posted sales of $58.8 million, up 149.2% from $23.6 million the previous year. Motorhome chassis sales generated by the Spartan Chassis Inc. subsidiary were $18.5 million.
Spartan reported a net loss for the first quarter of $2.0 million, or 6 cents per diluted share, compared to a net loss of $898,000, or 3 cents per diluted share, the year prior. Excluding restructuring charges of $5.4 million, Spartan posted adjusted operating earnings of 4 cents per diluted share.
Most of the restructuring cost resulted from the impaired asset value of Utilimaster’s Wakarusa, Ind., production complex. Management expects annual cost reductions of $4 million or more after Utilimaster’s relocation to Bristol, Ind., is complete.
John Sztykiel, president and CEO of Spartan Motors, noted, “Our blended growth strategy consists of organic growth, alliances and acquisitions, and Spartan’s improved results for the first quarter illustrate our strategy is sound. Beginning in late 2009, the acquisition of Utilimaster diversified our revenue stream. We then generated organic growth by developing new products for Utilimaster. Now, with the steps we recently announced with new partners Gimaex and Renault, we intend to strengthen the Spartan brand further and drive additional revenue growth through alliances.”
Adjusted gross profit for the first quarter of 2012 was $17.4 million, excluding a previously disclosed restructuring charge of $3.6 million. Excluding the restructuring charge, Spartan posted an adjusted gross margin of 14.6% of sales compared to 13.6% in the first quarter of 2011. On a GAAP basis, Spartan reported gross profit of $13.7 million, compared to gross profit of $13.0 million a year ago.
“Spartan continued to follow its operating plan during the first quarter, which translated into improved operating performance,” said Joe Nowicki, CFO of Spartan Motors. “Our Utilimaster business was particularly strong during the quarter, both in vehicle sales and aftermarket parts. We also believe we outperformed major competitors in the emergency response market and continued to gain share during the first quarter of 2012. While our results for the quarter showed progress compared to last year, we recognize that we still have much room for improvement. As we increase our focus on improving our operational efficiency, we expect to drive margins higher.”
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