Spartan Motors Inc. today (Nov. 1) reported net income rose 390.9% to $13.5 million, or 38 cents per share, compared to $2.7 million, or 8 cents per share, in the third quarter of 2016.
The Charlotte, Mich.-based company reported that the increase reflects the release of a $6.3 million, or 18 cents per share, tax valuation allowance recorded in 2015, as a result of the Spartan’s improved financial condition. Adjusted net income rose 119.7% to $7.4 million, or 21 cents per share, which excludes the $6.3 million tax valuation allowance adjustment. This compares to adjusted net income of $3.4 million, or 10 cents per share, in the prior year.
Sales increased 27.3% to $189.2 million from $148.7 million while gross margin improved 300 basis points, or 24.8%, to 15.1% of sales compared to 12.1% of sales. Adjusted EBITDA increased $5.5 million, or 74.9%, to $12.9 million, or 6.8% of sales, compared to $7.4 million, or 5.0% of sales.
Spartan’s Specialty Chassis and Vehicles segment, which includes motorhome supplier Spartan Chassis Inc., saw revenue increase $18.2 million, or 59%, to $49 million from $30.8 million. Sales of motorhome chassis increased 65.7% to $37 million from $22.3 million, due primarily to increased shipments as a result of market share gains.
“We are very pleased with the strong operating results achieved for the quarter,” said Daryl Adams, president and CEO of Spartan Motors. “Not only does it represent, on an adjusted basis, our seventh profitable quarter in a row, it also highlights a significant milestone as our Emergency Response segment returned to profitability generating $2.5 million of adjusted EBITDA for the quarter – up $3.7 million from last year. Our strong financial performance across all business segments reflects a continued focus on sales growth and operational performance by the entire Spartan team.”
Adjusted EBITDA increased $3.8 million, or 287.1%, to $5.1 million, or 10.5% of sales, from $1.3 million, or 4.3% of sales, a year ago, primarily due to increased sales and improved operational performance.
Backlog was up 97.6% to $537.7 million at Sept. 30 and reflects the recently announced $214 million USPS order and the acquisition of Smeal in January 2017. This compares to $272.1 million at Sept. 30. Segment backlog totaled $31.9 million, up 58.4%, compared to $20.1 million a year ago.
To view the full report click here.