Spartan Chassis Inc., a subsidiary of Spartan Motors Inc., today (Nov. 27) presented a new Class A Front Engine Gasoline (FEG) concept chassis to capitalize on the growth of smaller Class A recreational vehicles (22K to 28K GVWR) and the increasing demand for gasoline powered engines in the motorized segment.
Code named the Extol, this chassis presented at the RVIA National RV Trade Show in Louisville, Ky., offers signigficant powertrain and chassis performance improvements which will enable RV OEMs and their dealers to capture additional sales, according to a news release.
Powered by an 8.8 Liter engine that offers 430 HP and 512 lb.-ft. of torque (@3400 RPM) the engine offers a sizable performance improvement over current offerings in the market today. Branded Spartan and developed in cooperation with Power Solutions International, Inc. (PSI) (OTCBB:PSIX.OB) a leader in the design, engineering and manufacture of engines for industrial and off/on-road markets, the engine is right-sized to the Class A growth opportunity and offers the performance end-users seek for an improved driving and ownership experience.
“This new chassis development illustrates both our long-term commitment to the RV business and, more importantly, our interest to continually find new business growth opportunities for our OEM partners in the RV industry.”
The Extol value proposition includes multiple dimensions including:
- Chassis performance: a superior ride quality achieved through use of Spartan’s proprietary suspension and the new Compression Fluid Strut.
- Superior handling: achieved by tuning the chassis to the size, weight distribution, and profile of the RV OEM’s body.
- Engine performance: the 8.8-liter gasoline engine provides a durable, high-performance big block engine which delivers a 20% improvement in power and 15% better fuel-efficiency than previous models.
- Engine durability: the heavy-duty, durable design includes a significantly stronger crankcase and a forged and induction hardened crankshaft, creating a block that can deliver 1,000 ft-lb of torque.
About Spartan Chassis Inc.
Spartan Chassis Inc. is a world-class leader in the engineering, manufacturing and marketing of chassis and aftermarket parts for emergency-response, recreational vehicle (RV), defense and specialty vehicles. End users recognize and request the Spartan Chassis brand, which consistently delivers superior performance, exceptional safety ratings and innovations which distinguish us from the competition. Visit Spartan Chassis at www.spartanchassis.com.
Spartan Motors Inc. reported a net loss for its third quarter on a 6% decline in sales while RV revenues improved 20.9%.
The Charlotte, Mich.-based company, parent to Spartan Chassis Inc., posted third-quarter revenues of $112.9 million compared to $120.3 million a year ago. Spartan reported a net loss of $0.3 million for the third quarter, or 1 cent per diluted share, compared to net income of $3.2 million, or 10 cents per diluted share in the third quarter of 2011.
Excluding pre-tax restructuring charges of $1.6 million, Spartan posted adjusted operating earnings for the quarter of 2 cents per diluted share.
CEO John Sztykiel noted, “Spartan continued its trend of generating an adjusted operating profit through the third quarter of 2012 as our Emergency Response and Specialty Vehicles units posted growth in revenue and order backlog compared to the third quarter of 2011.
“The improved performance of these units underscores the importance of our diversification strategy as the growth in these segments partially offset a slower quarter in our Delivery & Service Vehicles unit. We are executing our plan and continuing our momentum in returning our ER and Specialty Vehicles units to growth and taking action to improve our operations.”
A breakdown by division showed:
• The Specialty Vehicles segment generated revenue of $23.9 million in the third quarter of 2012, up 0.8% from $23.8 million in the year-ago third quarter. Most of the increase came from higher sales of recreational vehicle chassis, which totaled $17.1 million for the third quarter of 2012, an increase of $3 million, or 20.9%, over the third quarter of 2011. RV chassis sales increased as RV manufacturers using Spartan’s custom chassis increased their sales and market share during the third quarter of 2012.
• Spartan’s Emergency Response Vehicles segment, which includes both the Emergency Response Chassis and Emergency Response Bodies operations, posted a sales gain of $4.6 million, or 12.9%, in the third quarter of 2012 compared to the prior year. Sales of Spartan’s custom chassis accounted for most of the increase, as the market gradually recovered and responded favorably to Spartan’s new product offerings. During the quarter, Spartan shipped the first few ER chassis equipped with the Spartan APS advanced airbag restraint system.
• The Delivery & Service Vehicles segment posted third quarter 2012 revenue of $49.0 million, down from $61.2 million in the third quarter of 2011. The revenue decline was largely due to the decline in aftermarket accessory sales during the most recent third quarter. Vehicle sales in Q3 2012 were adversely affected to a lesser extent by a decline in walk-in van sales compared to Q3 2011 when DSV shipped a record number of units to a major customer. Shortages of some materials also pushed out production of some walk-in van units beyond Q3 2012.
To view the entire report click here.
Spartan Motors Inc. today (Aug. 2) announced operating results for the second quarter of 2012. Revenues totaled $114.4 million, up 15% from the second quarter of 2011. Spartan reported net income for the second quarter of $2.4 million, or $0.07 per diluted share, compared to a net loss of $2.2 million, or $0.07 per diluted share, in the second quarter of 2011. Excluding restructuring charges of $0.7 million, Spartan posted adjusted operating earnings of $0.08 per diluted share in the second quarter of 2012, versus an adjusted net loss of $0.01 per diluted share in the second quarter of 2011.
CEO John Sztykiel noted, “Our strategy of blended growth combined with improved operating performance is the right plan for Spartan. Our quarterly results showed the progress we have made on both fronts. We expect to make further progress in operational improvements as we relocate Utilimaster’s operations to Bristol (Ind.) and the Reach to Charlotte (Mich.), among other operational initiatives.”
A breakdown by segment showed:
• The Delivery & Service Vehicles (“DSV”) unit posted second quarter 2012 revenue of $47.8 million, up 23.2% from $38.8 million in the second quarter of 2011. Sales of walk-in vans, truck bodies and aftermarket products including keyless entry, all rose from the prior-year second quarter. Vehicles sales rose to $25.0 million from $22.9 million the previous year while aftermarket parts and field service solutions revenue totaled $22.7 million compared to $15.8 million.
• Spartan’s Emergency Response (“ERC”) and Recreational & Specialty (“RSC”) chassis businesses posted higher sales during the second quarter of 2012 compared to the prior-year period. Sales at the ERC unit totaled $28 million in the most recent quarter, up from $22.2 million in the second quarter of 2011. Revenue for RSC increased to $16.2 million in the second quarter of 2012 versus $15.2 million in the prior-year second quarter.
• Sales at Spartan’s Emergency Response Vehicles (“ERV”) group rose to $15.6 million in the second quarter of 2012, from $13.9 million in the second quarter of 2011. ERV sales grew from the prior year despite a short-term lack of commercial chassis availability during the quarter. One of the two suppliers affected returned to more normal chassis production toward the end of the second quarter of 2012, thereby alleviating most of the chassis shortage. The shortage of commercial chassis negatively impacted second quarter 2012 revenue by approximately $1.2 million.
Spartan’s gross margin excluding restructuring items was 16.9% in the second quarter of 2012 versus 14.5% in the second quarter of 2011. Positively impacting gross profit and gross margin were higher chassis production volumes, favorable mix at Utilimaster due to higher aftermarket parts sales, plus improved operating efficiency throughout the Company. Including restructuring items of $0.6 million in the second quarter of 2012 and $1.7 million in the second quarter of 2011, gross margin was 16.4% and 12.7% for the second quarter of 2012 and 2011, respectively. Restructuring charges in the second quarter of 2012 were mainly related to the relocation of DSV’s Utilimaster operations to Bristol, Ind.
Operating expenses in the second quarter of 2012 totaled $14.8 million, or 12.9% of sales, excluding restructuring charges, compared to $15.3 million, or 15.4% of sales, in the second quarter of 2011. Restructuring charges in the second quarter of 2012 were $0.1 million, or 0.1% of sales, versus $1.1 million, or 1.1% of sales in the second quarter of 2011. Restructuring charges for the most recent quarter were due primarily to the transfer of Reach walk-in van production to Spartan’s Charlotte, Mich. facility. Including restructuring charges, operating expense in the second quarter of 2012 was $14.9 million or 13.0% of sales, compared to $16.3 million or 16.4% of sales in the prior-year second quarter.
Regarding the company’s outlook, CFO Joe Nowicki stated, “Our expectations for the year remain largely unchanged. We expect 2012 revenue to increase from 2011 in the mid- to upper-single digits, a slight increase from our last update. We are adjusting our projected gross margin for the year down slightly, to the 14.5 – 15% range, with operating expenses of 12 – 12.5%. For the year, we expect revenue growth in our Emergency Response businesses as well as at Utilimaster, but remind investors that Utilimaster’s margins will be negatively impacted by the completion of our keyless entry program in July and less efficient vehicle production until the relocation to Bristol is complete. We continue to move forward with our initiatives and expect to generate continued profitability in future quarters.”
To read the entire report click here.
Production of the new environmentally-friendly Reach delivery van has started to migrate from the Utilimaster Corp. plant in Wakarusa, Ind., to the Spartan Motors Inc. campus in Charlotte, Mich., according to a report by the Elkhart Truth.
Although the manufacturing schedule was delayed by three months, the vans are being built. Spartan, parent company of Utilimaster, is expecting to ship a total of 500 to 1,000 Reach vehicles in 2012 and anticipates production will nearly double in 2013.
As part of the original Reach launch plan, the assembly line will shift north from Indiana to the Spartan headquarters which will put the body assembly closer to the Isuzu diesel chassis operation.
Despite losing the new van, Utilimaster has a backlog of orders and is growing its payroll. To date, about 80 new production workers have been hired and the company is looking to add another 150 by the end of August. The manufacturer has a current workforce of 839.
To read the entire story in the Elkhart Truth click here.
The Indiana Economic Development Corp. (IEDC) has played a role in the expansion of the RV industry in Elkhart County.
As reported by The Elkhart Truth, in Elkhart County since 2011, the economic development organization has been a part of nine expansions, including Lippert Components and Kinro Manufacturing Inc., Supreme Industries Inc. and Spartan Motors Inc. totaling $31.7 million in new investment and 1,608 new jobs by 2015.
The companies that have grown in Elkhart County 2011 received $9.4 million in performance-based tax credits and $732,500 in training grants from the IEDC.
Daniel J. Hasler, CEO of the state economic development agency, is optimistic that 250 companies will choose Indiana in 2012 to either expand or relocate their operations. He pointed to the high rankings from CEO magazine and the Tax Foundation along with the infrastructure investments funded by Major Moves and the recently passed Right to Work legislation as indicators of Indiana’s ability to appeal to businesses.
Click here to read the entire story.
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.”
To view the entire report click here.
Spartan Motors Inc. today (Feb. 24) announced that Andrew M. Rooke has been named to the company’s board.
Rooke currently serves as president and COO of Manitex International Inc., a leading North American manufacturer of engineered lifting equipment. He has held this position since 2007. His professional experience includes GKN Sinter Metals, where he served as CFO, and with other organizations that include Quaker Oats Ltd. and Rolls Royce Ltd.
John Sztykiel, CEO of Spartan Motors, stated, “The board has been integral in transforming Spartan Motors, ensuring accountability and providing leadership as management executes its strategy. Having Andrew join the board makes it stronger, which in turn strengthens the company and ensures that Spartan evolves in the right direction.”
Rooke holds a bachelor’s in economics from the University of York, England, and is a Chartered Accountant. He is a native of Birmingham, England and currently resides in Bloomfield Hills, Mich.
Spartan Motor’s Inc. announcement Tuesday (Feb. 14) that it was relocating operations for its Utilimaster Corp. subsidiary proved to be a wash as far as the overall employment picture in Indiana’s Elkhart County because no jobs are ultimately being shifted out of the northern Indiana county. But for two small communities it was pivotal news, as Bristol’s fortunes rose and Wakarusa’s sunk quickly.
As reported by the Goshen News, John Forbes, president of custom vehicle manufacturer Utilimaster, announced the company would be moving from Wakarusa to Bristol, taking 600 full-time jobs and 200 temporary jobs with it.
Standing inside the massive former Odyssey Group building in the Earthway Rail Park on Bristol’s southwest edge, Utilimaster President Forbes stood in front of a knot of TV cameras and reporters and said the decision was based on creating an efficient workplace.
“This facility is 425,000 square feet,” he said. “It is a clean, newer facility than our current campus and it gives us a great opportunity to grow out business, support our customers and support our team members for years to come.”
“We are very excited about the opportunity to grow our business,” he continued. “Last year we enjoyed 46% sales growth and that allows us to be in a position to invest in the future of our business.”
The news of the move was broken to Wakarusa town officials at 7:30 a.m. Tuesday. In a town that saw more than a thousand jobs swept away by the recession when Monaco Coach folded in 2008, it was another “Oh, no,” moment.
“We weren’t ready for that. It was kind of a shock,” said Jeff Troxel, Wakarusa Town Council member.
The silver lining in the announcement is that the current work force will remain intact and be able to move with the plant if workers want to make the drive north.
According to the Goshen News, just hours after the surprise announcement, Troxel said he was trying to stay optimistic as he watches another long-time local company leave his small town. He said the Elkhart County Economic Development Corp. will be working to market the Utilimaster complex, which consists of 106 acres containing 16 aging buildings.
“We are resilient,” Troxel said. “We will get through this. It’s a neat town and it is a great place for business to come. I am looking forward to moving forward and having some businesses come to our location.”
The condition and size of the Utilimaster complex is one of the reasons Forbes said the company needed to move. The Odyssey building is large, but at 425,000 square feet is smaller than the 760,000-square-feet of space under roofs at the Utilimaster location.
Forbes said he expects there will be many efficiencies that stem from the move, especially in the movement of parts and vehicles under construction, which will have a much shorter assembly line. Utilimaster vehicles now travel 2 1/2 miles during the assembly process, and Forbes said that distance will be reduced to about a half-mile.
“Today in Wakarusa we have 16 different facilities,” Forbes said. “So our product flows from building to building, not in the most efficient fashion. Putting our operations under one roof gives us a great opportunity to do things in a higher quality environment a safer environment and a more efficient environment.”
The process for the move began when Spartan Motors acquired Utilimaster in 2009, according to Forbes. He said planning began to make the company more efficient and profitable, which meant a new facility was needed. He said company officials looked at sites in Michigan, Indiana and in the South, but decided to stay in Elkhart County.
Asked what the determining factor was, he said it was the ability to keep the company’s production team intact.
But the key to making all the changes happen, Forbes said, is a package of incentives the company is asking for from state and local entities, including the Bristol Town Council.
David Ogle, president of the Economic Development Corp. of Elkhart County, outlined the plans with the Bristol council, which met in an informal work session Tuesday night.
Ogle said Utilimaster wants to stay in Indiana and stay in Elkhart County, although the company looked at other states before deciding on the relocation.
“We think we are competitive. We feel for Wakarusa, but it is nothing they did. It is an efficiency thing,” Ogle said.
The company will seek state and local incentives such as tax abatements and Tax Incremental Financing as it moves the operation to Bristol. The town now has two TIF districts, and may be asked to approve a third one.
Ogle said state officials are expected to act quickly on the request for aid. He said the state may be in a position to make an offer to the company within 10 days.
“We are willing to go that extra mile,” said Bristol Town Council president Floyd Lynch said Tuesday night.
“Just keep us in the loop,” he told Ogle.
The town council will hold a meeting Thursday, then another work session March 13 and regular meeting March 15.
In a conference call Tuesday (Feb. 14) following Spartan Motor Inc.’s fourth-quarter and year-end financial report, CEO and President John Sztykiel elaborated on the company’s announcement that it would be moving operations for its Utilimaster Corp. subsidiary from Wakarusa, Ind., to nearby Bristol.
According to a transcript from the earnings call (to read the entire transcript click here), the relocation would include motorhome chassis manufacturing that was to be transferred from Charlotte, Mich., to the Utilimaster facility in 2012. He also said that production of the Reach van, a commercial vehicle currently being built in Wakarusa, would be moved to Charlotte as previously announced in 2011.
Sztykiel stated: “From an RV perspective, one of the benefits of Bristol as well is we’ve talked about moving the RV business down to Bristol, or I should say down to Northern Indiana. All the RV chassis will be built in the Bristol facility. So we’ll now be within minutes of the RV marketplace, thus improving our competitive position in a substantial way.”
RVBUSINESS.com also learned that Utilimaster will be moving into a vacant facility formerly occupied by industry supplier Odyssey Group. Odyssey began liquidating inventory in January 2009 following reports that the company was closing the Bristol plant.
Below are Sztykiel comments regarding the Utilimaster move.
“Let’s talk a few minutes about Utilimaster Bristol consolidation, of which there is a separate release on that today, an extremely exciting event. In earlier calls, Joe and I have had business with each one of you and at times you’ve all complemented us on the improvement of Utilimaster. We’ve all said that there is still much more improvement yet to be had, as there is tremendous opportunity.
Earlier today, we announced the third step in our strategic plan to meet these goals. The first step was to improve operations and profitability in the existing Wakarusa facility, a tact that we’ve accomplished and Joe is going to get into some of that detail. The second step was to bring the Reach van product to market. That was accomplished.
The third step was to look or develop the right facility operational map, and that is now in Bristol, Indiana. To give you some idea into this goal for the product and what it means, we signed a lease with Fruit Hills Investments today on the Bristol facility that will allow us to move from a sprawling 16-building campus, which is over 700,000 square feet into a more modern and efficient one-building under one roof that is about 13 years old and has about 425,000 square feet.
What’s interesting is in Wakarusa, most of the buildings are more than 40 years old with the newest being 30 years old. And to give you just a little bit of perspective, if you ever went there and you just washed your car and you drove around the facility, visiting the different buildings and again 16 buildings, so when you think about the added indirect cost, the overhead, the operating expense, the inefficiencies et cetera, when you would come out of there with a really dirty car, and then you’d walk away and say, this is absolute madness, trying to build products within 16 buildings with the average age of 30 to 40 years old.
As the release noted and please take time to look at the release, we’ll be reducing the non-value added process in material handling by over 80%. When you take a look at the length of line for a walk-in during the travel, it’ll be going from 2.5 miles to less than 0.5 mile. It’s huge simplification in the assembly process, also the ability to deliver a higher-quality product.
Third, the assembly lines in the new Bristol facility will be much more flexible. They will allow changes in the layout and equipment rather easily. It’s our expectation that the new plan will not have any permanent fixtures in place that dictate how the assembly lines must be laid out.
What’s interesting about the facility is when I first went in there, I didn’t see very many columns and whoever built the building was extremely intelligent 13 years ago, because they have very few columns, very, very high ceilings, very strong support. So from a facility’s perspective, it is ideal from a manufacturing point of view. And when I spoke about where we came from to where we’re going, we’re going from 106 acres to 26 acres.
The reality is facility’s operations is no different than your house. If you have a large house, over time you’re just going to buy a lot of stuff and you’re probably not going to use it and you’re going to accumulate it. You’re not going to manage a personal sheet and cash very, very well. The same is true in a business. You go from 106 acres to 26 acres. I have no doubt our inventory turns will go up, our inventory will come down and we will see significant cash balance sheet improvement in the new Bristol facility. Why? Because you just have less space. So as we look forward, we’re extremely excited.
Fourth, the working process from one plant to another, and as mentioned in the release, these changes should result in annual cost saving reductions of $4 million a year at a minimum. So when you look at Utilimaster and you’ve heard Joe and I talk over the last 12 months while you’ve complemented us on the rate of improvement, et cetera, this is the third step of the plan. And we have several steps yet to execute, but in 2012, we will be very focused on bringing horizon on line to ensure that we see the operational benefits late in the second half and throughout all of 2013.
From an RV perspective, one of the benefits of Bristol as well is we’ve talked about moving the RV business down to Bristol, Indiana, or I should say down to Northern Indiana. All the RV chassis will be built in the Bristol facility. So we’ll now be within minutes of the RV marketplace, thus improving our competitive position in a substantial way.
At the same time, just to reiterate, when that happens, we will be moving the Reach van production from Indiana up to the Charlotte campus. So from an Isuzu partnership perspective, everything with and around Isuzu will be located in Charlotte, Mich.”
Spartan Motors Inc. today (Feb. 14) announced operating results for the fourth quarter and full year 2011.
Revenues for the fourth quarter of 2011 were $111.2 million, down 12% from the fourth quarter of 2010. Most of the decline in sales compared to the fourth quarter of 2010 was due to a non-recurring order for defense parts in the prior year. Revenue in the fourth quarter of 2011 was also negatively impacted by delayed shipments of the Reach commercial van and some walk-in vans. Net income for the fourth quarter of 2011 was $0.7 million, or $0.02 per diluted share, compared to net income of $3.4 million, or $0.10 per diluted share.
Revenue for the full year totaled $426.0 million versus $480.7 million in 2010, a decline of 11.4%. Declines in defense-related chassis and service parts sales, along with general softness in most other business units accounted for lower revenue compared to 2010. Partially offsetting weaker segments was the Delivery and Service business, which posted a sales gain of 46.5%t for the year.
Gross profit for the year totaled $60.6 million, or 14.2% of sales, for 2011. For 2010, gross profit totaled $72.5 million, or 15.1% of sales. Lower gross profit in 2011 was due to lower total revenue as well as the lack of higher-margin defense parts sales and a less profitable product mix in the Emergency Response Bodies business.
“As we focus on 2012, we will continue to execute our plan, a blended strategy of acquisitions, alliances, organic growth and systematically reducing our operating costs,” said John Sztykiel, President and CEO of Spartan Motors. “Our total order backlog increased nearly 2% over the fourth quarter of 2010, with Utilimaster more than doubling its backlog compared to last year. We reduced the lead time to produce an Emergency Response chassis from seven months to four, significantly shortening our cash conversion cycle. We accomplished all of this despite operating in challenging markets. We are dedicated to capitalizing on the progress we have made and expect to deliver sustained revenue and profit growth in 2012 and beyond.”
To view the entire report click here.
Spartan Motors Inc. today (Feb. 14) announced that it will relocate Utilimaster Corp.’s manufacturing operations, headquarters and all supporting departments and functions to Bristol, Ind., from the current location in nearby Wakarusa. The move is expected to begin during the second quarter of 2012 and be completed by year end.
According to a press release, the final lease agreements are pending as company officials are working closely with leaders from state, county and local government in Indiana to finalize the negotiation of incentives for the relocation, which will result in continued economic growth and stability for Utilimaster, as well as the Elkhart area.
The move to Bristol, located 20 miles east of Wakarusa, will consolidate Utilimaster’s operations into one facility from its current campus of 16 buildings. Moving into a single plant, combined with lean manufacturing practices, will enable Utilimaster to improve product quality and manufacturing efficiency by reducing operating costs and eliminating non-value added steps. Other highlights include:
• Reducing footprint from 760,000 to 425,000 square feet.
• Campus shrinks from 106 to 26 acres.
• Estimated annual savings of $4 million.
• Improved manufacturing flow, containerization and kitting.
• 80% reduction of material/vehicle movement.
• Production lines will accommodate multiple platforms.
• Increased sub-assembly capacities.
• A new manufacturing showcase for customers.
“The competitive nature of the delivery and service market requires that we continuously assess and improve our operations,” said Tom Gorman, COO of Spartan Motors, parent to industry supplier Spartan Chassis Inc. “The relocation to the Bristol plant will create a safer manufacturing environment for our associates and a platform from which we can accelerate our ongoing quality improvement efforts, in order to grow the Delivery and Service business in the future.
“While Utilimaster continues to perform well, we are taking these steps to ensure the business remains competitive in the long term. The dramatic reduction of non-value added operations represents an opportunity to reduce costs, and we’re focused on ensuring this strategy delivers the right results.”
The Bristol facility features over 425,000 square feet of contiguous manufacturing space that will enable continuous flow and improved work cell layout.
“Utilimaster has experienced significant growth since we acquired the company more than two years ago,” said John Sztykiel, president and CEO of Spartan Motors. “Their successful integration has exceeded our acquisition performance targets and is an important part of Spartan today. Ensuring Utilimaster’s long-term growth and profitability are driving our actions as we consolidate Utilimaster into one modern facility.
“This is the third step of our strategic plan to enhance Utilimaster’s performance. Our first step was to improve operating income in the current facilities; and the second was to bring the Reach to market. Our third step is to consolidate Utilimaster into one modern facility in order to enhance further operational efficiency and income.”
Reflecting the current weakness in the commercial real estate market in Wakarusa, the company will incur an asset impairment charge of $4 million to $6 million in the first quarter of 2012 as a result of closing the facility.
Charlotte, Mich.-based Spartan Motors Inc. today (Oct. 26) announced improved operating results for the third quarter of 2011 reflecting significant gains in its delivery and service vehicles segment and the ongoing benefits of actions taken earlier in the year to realign operations.
Revenues were $120.3 million, up 21% from the second quarter, driven by increased sales in the delivery and service segment ahead of the peak holiday season, which offset softness in other markets Spartan serves. Also contributing to the improvement in third quarter revenues were sizable orders for aftermarket parts and assemblies. Improved product mix and initial cost savings due to Spartan’s operational realignment in the previous quarter resulted in net income of $3.2 million, or $0.10 per diluted share.
Third quarter 2011 results:
• Net sales of $120.3 million (flat with Q3 2010 sales of $120.6 million).
• Gross margin of 17% of sales (up from 16.4% in Q3 2010)
• Operating expense of $15.2 million (up $0.8 million compared to Q3 2010)
• Net income of $3.2 million 10 cents per diluted share), down from $3.3 million (11 cents per diluted share) a year ago
• Cash from continuing operations of $26.4 million (for the first nine months of 2011)
• Ending consolidated backlog of $142.8 million (down 20.4 percent from Q2 2011)
• Total debt of $5.2 million
• Cash balance of $30.5 million (up $16.0 million from Q4 2010)
“Our top line performance highlighted the strength of our diversified business lines as solid growth in Utilimaster’s business drove outstanding results in our delivery and service vehicles segment,” said John Sztykiel, president and CEO of Spartan Motors. “The performance at Utilimaster helped to offset softness in the recreational vehicle, emergency response and defense markets and helped reduce our exposure to government-dependent revenue streams.
“Our net income for the third quarter validates the restructuring actions we have taken over the last several months and demonstrates our ability to drive significant leverage to the bottom line. Our relationship with Isuzu grows stronger as we approach full capacity with production of the N-Series Gas cab and chassis. As we begin generating sales of the Reach commercial van that will also help us achieve a more diversified revenue mix.”
To view the full report click here.
Utilimaster Corp., a subsidiary of Charlotte, Mich.-based Spartan Motors Inc. specializing in walk-in vans and commercial truck bodies for the delivery and service market, and Anaheim, Calif.-based Isuzu Commercial Truck of America, Inc., one of the world’s largest manufacturers of medium- and heavy-duty trucks, jointly launched the Reach commercial van today (Oct. 25) at Spartan’s Utilimaster plant in Wakarusa, Ind.
Senior management from Utilimaster, Spartan and Isuzu held a ribbon-cutting ceremony and ceremonial gift exchange before an audience of customers, government officials, regional media and special guests.
“The Reach represents a great opportunity to impact our customers’ businesses, significantly reduce both fuel consumption across their fleets as well as their carbon footprint,” said Utilimaster President John Forbes. “Today is the culmination of a focused program that benefited from the global resources and power train capabilities of Isuzu and the market-specific knowledge and product development capabilities of Utilimaster.”
“We are leading – not following – the changing needs of the marketplace,“ Spartan President & CEO John Sztykiel told the assemblage, adding that the Reach is “the biggest breakthrough in the commercial van marketplace in the last 30 years” because of its styling, fuel-conscious drivetrain and durable chassis.
First introduced in March, the Reach – with a Utilimaster-designed body atop an Isuzu NPR ECO-MAX chassis powered by Isuzu’s 3.0-liter diesel engine – offers the functionality of a custom-built work truck along with the styling and ergonomics of a cargo van, Spartan reports. Fuel economy is a key selling point of the Reach, according to Spartan, which claims that it yields 35% better fuel economy than a traditional commercial van.
Spartan claims the Reach offers “best-in-class mileage” and meets EPA emissions standards, yet still provides true commercial truck capabilities and delivers a dramatically lower cost of ownership than traditional walk-in vans.
“The continued diligent work of everyone involved on this product has positioned us for further growth in the delivery and service market,” Sztykiel commented. “Today we celebrate the success of this team and their ability to produce a sustainable product that meets the duty-cycle demands of our customers, improved safety performance and driver ergonomics, as well as an exceptionally low cost of ownership.”
“Powering the Reach is Isuzu’s state-of-the-art, bio-diesel fuel compatible 4JJ1-TC 3.0-liter turbocharged engine mated to an Aisin medium-duty 6-speed automatic transmission,” Spartan’s release states. “Both the engine and transmission have class-leading B10 durability ratings of 310,000 miles, meaning that 90% of units will reach that mileage before requiring an overhaul.
“Utilimaster guided the development of the Reach’s aerodynamic shape, along with its use of composite materials, which together improve fuel efficiency and reduce interior noise,” the release continues. “The lightweight composite materials provide a 700-pound weight savings compared to traditional aluminum and steel materials. The Reach van also employs impact-resistant composite panels designed to reduce overall maintenance costs.”
Spartan’s new Reach, which some in the industry have speculated could have small motorhome applications, has a 151-inch wheelbase and is available in 12-and-14 foot body lengths. With an interior up to 27 inches higher than a conventional domestic van — and ten inches wider than imported vans — the Reach’s cargo area offers 540 or 630 cubic feet of storage, depending on the body length selected, Spartan reports.
Meanwhile, Hodge Patel, district director for 2nd District Rep. Joe Donnelly, told the Utilimaster crowd that the Reach launch represented yet another step in the recovery of Elkhart County, where the unemployment rate exceeded a “staggering” 20% in March of 2009 during the pit of the recession. Patel applauded Spartan for taking an inventive approach in new product development that helped bring jobs to the area. “We see it right here behind us – a light weight vehicle, better fuel efficiency and a better design,” said Patel.
The following is a column authored by Tom Walsh of the Detroit Free Press offering a look at Spartan Motors Inc.’s ability to roll with the times.
“Adapt. Evolve. Lead.”
John Sztykiel, president and CEO of Spartan Motors, kept repeating that mantra during our breakfast last week.
It may be the only way for him to keep his sanity.
In a topsy-turvy business world typified by last week’s stock market spasms, few companies have endured more extreme ups and downs in the past few years than Spartan Motors.
When I wrote in 2007 about Spartan — a builder of custom chassis and motor vehicles — the company was on a roll.
The Iraq war was in full swing and Spartan had suddenly become a favored supplier of Mine Resistant Ambush Protected (MRAP) armored vehicles to the U.S. military.
For a modest outfit whose previous product mix was mostly fire engines, ambulances and motorhome chassis, “it was like a gold rush,” Sztykiel recalled.
Employment at Spartan, based in Charlotte, about 20 miles southwest of Lansing, doubled to more than 1,000 within 20 months. Sales jumped 89% in two years, but then, as the Iraq war wound down and MRAP orders dried up, plummeted from $844 million in 2008 to $409 million a year later.
Net profit plunged from $42 million in 2008 to $12 million in 2009 and $4 million last year. Spartan started this year with two quarterly losses. Its stock price, near $25 per share in 2007, fell 90% to barely $2 in late 2008 and ’09, and has recently traded near $5, closing Friday at $4.51.
Changing the mix
Sztykiel and his team have had to reinvent Spartan — and they appear to be making progress. Order backlogs have risen 33% so far this year to $179 million.
The big move to shift away from reliance on military orders was the acquisition in late 2009 of Utilimaster, an Indiana-based maker of delivery and service vans.
“Internet shopping and other changes in society are working in their favor,” Sztykiel said of Utilimaster vans used by such companies as UPS and Federal Express.
An alliance with Isuzu followed. Three months ago, Spartan began assembling Isuzu N-series commercial trucks in Charlotte. The N-series had been built at General Motors’ Janesville, Wis., plant until it closed in 2009.
Meanwhile, Isuzu and Utilimaster are partnering on a next-generation commercial van called the Reach, which promises 35% fuel-economy improvement in the segment.
“In 2008,” Sztykiel said, “89% of our business was government-related, including military and emergency-response vehicles. Now it’s only 45% government and 55% private.”
Spartan’s employment in the Charlotte area fell to around to 600 with the decline in MRAP orders, but the ramp-up of Isuzu N-series work has recently added 56 jobs and total Spartan employment is expected to reach 1,750 by year-end, with the biggest clusters in Michigan and Indiana.
Sztykiel expects a return to profitability the second half of this year.
And true to his adapt-evolve-lead mantra, he’s scouting for new revenue streams.
The step-van truck segment where Utilimaster is a market leader “is about 12,000 trucks a year,” he noted. “But the larger market for commercial vehicles, where Ford and Nissan and others play, is about 225,000 units a year.”
“Now if we snag just 2% of that, it would be nearly 5,000 units a year and 400 or 500 more employees …”
Editor’s Note: The following is a blog authored by Julian Gothard for Examiner.com.
John Sztykiel, president and CEO of Charlotte, Mich.-based Spartan Motors Inc., said during Tuesday’s (July 26) webcast following the company’s second-quarter earnings report that he remained bullish about Spartan’s future prospects in spite of the company recording a Q2 adjusted net loss of $424,000. The loss came on the back of $2.8 million in restructuring charges and a dramatic 14% drop in sales which cost the company some $16 million in lost revenue.
Sztykiel, who expects growth in both company revenue and earnings in the second half of the year, was upbeat about Spartan’s performance in the recreational vehicle market where, in spite of a slight improvement in the RV market as a whole, Spartan experienced a 26% fall in chassis sales. The Spartan CEO noted that the motorhome sales mix has shifted from high-end diesel to less expensive models in the Class A and Class C markets with some existing customers downsizing and new customers opting for smaller sized motorhomes.
As reported in June, Spartan Motors is relocating in 2012 their motorhome chassis manufacturing operation from Charlotte, to Wakarusa, Ind. Northern Indiana is home to many of Spartan’s chassis customers. Indeed, more than 60% of all RV’s and 58% of all Class A motorhomes are manufactured in the Hoosier State.
Sztykiel reiterated that Spartan’s current focus will remain on motorized RVs principally because of the size of the RV market from a dollar perspective and the RV market’s continued popularity amongst vacationers. An “RV is not only … inexpensive but it gives you the freedom to go wherever you want whenever you want. Thus as we look to the future we’re still very, very excited about it,” he said.