Spartan Motors Inc. today (Oct. 28) reported improved sales and solid profitability for its 2010 third quarter.
The results also included the sale of the assets of its Road Rescue ambulance business for approximately $8 million. Spartan’s third quarter performance was highlighted by increased sales of specialty vehicles and motorhome products, and substantially reduced operating expense as a percentage of sales compared to the same quarter of 2009.
Third quarter highlights:
- Net sales of $120.6 million (up 39.7% from Q3 2009, which did not include Utilimaster).
- Gross margin of 16.4% of sales (down from 18.8% in Q3 2009).
- Operating expenses of 11.9% of sales (down from 15.8% in Q3 2009).
- Net earnings from continuing operations of $3.5 million (up 112.1% from Q3 2009).
- Cash balance of $16.7 million (up $6.5 million from Q2 2010).
- Debt of $15.3 million (down $5 million from Q2 2010).
- Consolidated backlog of $172.6 million (down from $205.7 million in Q2 2010).
- Motorhome sales show continued stability with sales in the quarter up 94% from the same quarter of 2009, and sequentially up 3% from the second quarter of 2010.
“We are pleased with our accomplishments in the quarter. Our focus on creating compelling products and driving growth in profitable markets continues to serve us well. Our profitable results were complemented by the sale of Road Rescue, which was completed well ahead of expectations. The improvements made to our cost structure earlier in the year – while very difficult – contributed greatly to our performance in the quarter,” said John Sztykiel, president and CEO of Spartan Motors.
“Innovation is a core element of our culture, which continues to prove vital to our success at creating products for transforming markets and driving profitable market share. Our progress is evident as we recently showcased our 2010 emergency-response cab and chassis at the Fire-Rescue International Conference (FRI) with a 2010 EPA-certified Cummins diesel engine. In addition, the next-generation commercial vehicle and the N-Series gasoline chassis, generated through our new partnership with Isuzu, strategically position Spartan for significant long-term growth as we look to the delivery and service market.”
Allied Specialty Vehicles Inc. (ASV), a portfolio company of American Industrial Partners (AIP), today (Sept. 21) announced that it has purchased ambulance manufacturer Road Rescue from Spartan Motors Inc. in an asset transaction for $8 million. Road Rescue is a manufacturer of premium Type I and Type III ambulances.
AIP is parent company of Fleetwood RV Inc.
“We’re excited to add the Road Rescue brand to our portfolio of ambulance companies. For many years, Road Rescue has been regarded as one of the leading high-end builders of modular ambulances, and under ASV, we anticipate further enhancing that reputation,” Randall Swift, president and CEO of Winter Park, Fla.-based ASV, stated in a news release.
ASV, with revenue of approximately $1 billion, is a market leader in three industry segments: Fire & Emergency, Recreational Vehicles, and Bus & Industrial. The company was formed on August 25, 2010, through the combination of four existing portfolio companies of AIP: E-ONE Inc., Collins Industries Inc., and Halcore Group Inc.; with Fleetwood RV Inc. to be combined in the fourth quarter of this year.
American Industrial Partners is an operationally focused middle market private equity firm comprised primarily of multidisciplined engineers and experienced operators which makes control investments in North-American based industrial businesses and implements strategies to grow the earnings of those businesses. AIP has managed three prior funds which totaled over $1 billion and is currently investing its fourth fund, $405.5 million American Industrial Partners Capital Fund IV LP.
Spartan Motors Inc. today (July 23) reported results for its 2010 second quarter, which included the impact of the previously announced business realignment plan.
Spartan posted a net loss for the quarter of $2.6 million, which included the unfavorable impact of these actions. Before one-time restructuring charges, adjusted net earnings from continuing operations was a positive $900,000, or $0.03 per diluted share.
Second-quarter highlights (which reflect Road Rescue as a discontinued operation):
- Net sales of $115.7 million.
- Gross margin of 14.3% of sales (15.1 percent before restructuring charges).
- Operating expenses of 14.2% of sales (13.4% before restructuring charges).
- Restructuring charges of $1.8 million, or $0.03 per diluted share, net of tax.
- Cash balance of $10.1 million (up $5.7 million from Q1 2010).
- Debt of $20.3 million (down $3.1 million from Q1 2010).
- Consolidated backlog of $205.7 million.
John Sztykiel, president and CEO of Spartan Motors, said:, “In the second quarter, we focused our efforts on three key areas: exiting the Road Rescue business to focus on our more profitable markets, aligning our cost structure with our current and near term sales volumes and investing in promising and profitable growth opportunities. While we have a lot of complexity in our financial reports this quarter, when you peel back the results you will see that we made solid progress in our key financial metrics and also continued to invest in our strategic growth initiatives.”
Exit from Road Rescue Business
Spartan is fielding many inquiries from both strategic and financial buyers interested in acquiring Road Rescue, its ambulance manufacturing business.
Road Rescue has maintained the quality and reliability of shipments due to the dedication and commitment of the Marion, S.C., workforce
All Road Rescue results are now classified as discontinued operations and presented below income from continuing operations, net of tax
Spartan redefined reportable segments into Delivery and Service Vehicles, consisting of Utilimaster, and Specialty Vehicles, which consists of the company’s fire truck chassis, motorhome chassis, other vehicles, fire truck bodies and aftermarket parts and assemblies
Net loss from Road Rescue for the second quarter was $2.4 million, which includes $1.8 million of impairment and restructuring charges, net of tax
Realigning Cost Structure
Second quarter results from continuing operations included $1.8 million in restructuring charges related to realigning the business to current level and mix of revenues
Adjusted gross profit reached $17.5 million, while adjusted gross margin increased to , 15.1%, an improvement from first-quarter adjusted gross profit of $16.9 million, or 14.3 percent
Excluding restructuring charges, operating expenses in the quarter were reduced by $0.7 million compared to the same period in 2009. In addition, the second quarter of 2010 included $3.5 million of operating expenses related to Utilimaster that were not present in 2009 results
Operating cash flow was $22.1 million in the first six months of the year, driven by reduced working capital requirements that primarily consisted of a $16.0 million reduction in inventory levels
Investment in Profitable Growth Opportunities
R&D investment of $1.2 million in the current quarter related to costs for two major product introductions – the recently announced Next Generation Commercial Van (NGCV) being developed in conjunction with Isuzu and the development of new cab and chassis products related to the 2010 emissions standards
A prototype of the NGCV, a product of Spartan’s alliance with Isuzu, rolled off the line at Utilimaster this past week; production still on track to begin in mid-2011
Assembly relationship with Isuzu on the N-series chassis is proceeding according to plan, with production expected to begin in mid-2011
Crimson Fire’s new product, the “Transformer,” is complete and is being well received in the marketplace having achieved its first sale in Texas
Joe Nowicki, CFO, said, “Despite the loss for the quarter, we are very pleased with the pace of progress in implementing cost management and balance sheet initiatives across the organization. We began last fall realigning our cost structure to current and near-term demand and focusing on areas of our business that generate profitable market share. The actions we are taking are difficult, but improvements in our operating results, excluding the one-time charges, demonstrate that we are gaining ground toward achieving our interim financial goal of mid single-digit operating income. In addition, we are making substantial progress on continuing to strengthen our balance sheet – improvements in receivables and inventories, both dollars and turns, enabled us to further pay down debt and grow our cash balances, providing enhanced financial stability and future opportunity.”
Spartan Motors Inc. today (June 22) announced its intent to exit its Road Rescue ambulance operation as part of the company’s continuing review of all aspects of its business.
The exit will allow Charlotte, Mich.-based Spartan, which also manufactures Class A motorhome chassis, to focus its resources on the highest growth and profit opportunities. The exit from the underperforming Road Rescue operation is expected to be completed by the end of 2010. In addition, Spartan announced in a news release a number of actions designed to reduce expenses and better align its cost structure with current levels and mix of demand.
The exit from Spartan’s Road Rescue ambulance operation in Marion, S.C., is part of a long-term strategic review initiated at the beginning of the year of all parts of the company’s business. These actions are designed to focus Spartan’s resources on those operations with the greatest potential for sustainable growth and profitability. Spartan expects to complete the exit by the end of the year following the fulfillment of existing customer orders. The company is in discussions with potential purchasers to facilitate a sale of the operations or facilities as part of the exit plan. Road Rescue generated approximately $20 million in revenues in 2009 and it employs 132 full-time associates.
“We are strategically focused on providing compelling products that generate sustainable growth and profitable market share, highlighted by good momentum at Spartan Chassis and Crimson Fire, as well as our recently announced new commercial van product at Utilimaster and our collaborative efforts with Isuzu,” said John Sztykiel, president and CEO of Spartan Motors. “Over the last 12 months, Spartan has evolved, as has the emergency response market, and the Road Rescue operation is not large enough to justify the resource commitment when we have greater potential elsewhere. Road Rescue partnered with another ambulance company, where there is additional scale and product breadth, would be a real asset.”
Spartan also announced a number of actions to realign its cost structure. These included a temporary reduction in board of directors’ retainer fees, salary reductions for members of the executive leadership team and other senior leaders, some select work force reductions, and other actions as part of its continuing efforts to reduce fixed costs to better match its current level of business.
“Although these decisions are never easy, as they impact the lives of our associates and the communities we serve, we believe these actions will result in improved effectiveness in our operations. It also allows us to better focus our efforts in Spartan’s five core markets – emergency response, outdoor recreation/RV, defense, delivery and service, and specialty – while maximizing demand for Spartan chassis, aftermarket parts and assemblies and the Isuzu strategic alliance. We have tremendous strategic opportunity, and it is imperative we reduce our operational cost base to improve our position going forward.”
With the realignment actions and exit from Road Rescue, Spartan expects to incur pre-tax one-time charges of approximately $6 million to $7 million, the majority of which will be recognized in the company’s second and third quarter results. Management expects these actions to reduce the company’s permanent cost structure by $5 million to $6 million on an annualized pre-tax basis.
Joe Nowicki, CFO, added: “The actions we announced today represent our continuing efforts to right-size our operations based on the current business environment. Our exit from Road Rescue is a result of our ongoing evaluation of all areas of Spartan’s business and is an important next step in executing on our previously announced strategic financial plan. It will allow us to concentrate our resources and product development in our highest growth, most profitable opportunities, and we believe it was necessary to ensure our long-term success.”
Several RV-related firms are scheduled to make presentations at the prestigious 4th Annual Barrington Research Conference May 25-26 at the Four Seasons Hotel in Chbicago.
Among the nearly 50 presenters are management leaders representing Drew Industries Inc., TriMas Corp., Spartan Motors Inc. and Navistar International Corp.
Barrington’s Industrial Conference provides institutional investors with access to management through a series of one-on-one and small group meetings.
More information on the conference, including registration for institutional investors, is located at http://www.brai.com.
Spartan Motors Inc., Charlotte, Mich., announced today (April 27) break-even results for its 2010 first quarter that ended March 31 which were underscored by the company’s relentless focus to strengthen its balance sheet while continuing to make new product investments that will enhance the long-term growth and profitability of the business, according to a press release.
First-quarter highlights include:
- Net sales of $122.5 million, up 6.1% from Q1 2009.
- Gross margin of 14%.
- R&D cost of $5.3 million, which included $1.8 million for two major product introductions.
- Operating expenses of $16.9 million, 13.8% of sales.
- Break-even results with net income of $3,000, or $0.00 per diluted share.
- Ending cash balance of $4.4 million.
- Ending long-term debt balance of $12.2 million, a $23 million reduction from year-end.
- Consolidated backlog of $218.9 million.
”While demand in the first quarter was challenging in a number of our markets, the current economic climate has not diminished our long-term view of the business,” said John Sztykiel, Spartan Motors president and CEO. “During the quarter, we saw continued improvement in motorhomes and emergency response, which was offset by soft sales in aftermarket parts and assemblies and defense.
”While this shift in revenue mix had a negative impact on our gross margins, we remained steadfast in managing our operating costs, which enabled us to break even while improving our balance sheet and our long-term prospects for growth as we expensed $1.8 million for two major R&D projects. Looking out over the longer term, we are encouraged by the many growth opportunities for Spartan, including our recent agreement with Isuzu to assemble chassis and jointly develop our next-generation commercial vehicle, which will provide a platform for future growth in a number of markets.”
Consolidated net sales for the quarter were $122.5 million, up 6.1% from last year due to incremental Utilimaster sales, higher sales of motorhome chassis and an increase in sales at EVTeam. On a sequential basis, net sales rose 22% from the fourth quarter of 2009, due mainly to the strength of motorhome chassis sales, improvement at EVTeam and the addition of a full quarter of Utilimaster sales. Spartan’s EVTeam operating segment, which consists of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries, reported a 22.9% year-over-year increase in sales for the 2010 first quarter.
Sales of fire truck chassis in the quarter also increased 13.4% compared to the same period in 2009. Spartan’s chassis sales to the Class A diesel motorhome market increased by $24.3 million, driven by recent improvements in the overall recreational vehicle market. These gains in first-quarter sales were offset by a decrease of $48.5 million in other product sales, which consist primarily of APA and defense vehicle sales.
Given the significant shift in revenue mix away from APA and defense sales toward lower-margin products, gross margin in the first quarter of 2010 fell to 14% of sales from 22.6% in the first quarter of 2009. On a sequential basis, gross margins declined modestly, from 14.9% in the fourth quarter, due primarily to the continued shift in mix from APA and defense to motorhome and service and delivery vehicles.
Operating expenses for the 2010 first quarter increased by $0.1 million, or 0.8% compared to the same period last year. Spartan attributed the increase to the incremental operating expenses of Utilimaster, offset by the cost-reduction efforts put in place in the prior year. The company also spent $1.8 million on R&D-related costs for two major product introductions — the recently announced next-generation commercial vehicle being developed in conjunction with Isuzu and the development of a new cab and chassis related to the 2010 emissions standards.
Total operating expenses in the quarter were $16.9 million, up from $16.8 million in the same period last year. On a sequential basis, operating expenses increased from $15.0 million in the fourth quarter, primarily due to the additional incremental operating expenses from a full quarter of Utilimaster results, compared with the one month included in the final quarter of 2009.
Net income for the quarter was $3,000, or $0.00 per diluted share, compared with net income of $6.1 million, or $0.19 per diluted share in the prior year’s first quarter.
CFO Joe Nowicki said: “Some of our major accomplishments for the quarter lie within our balance sheet. We continued to work down receivables and were able to generate sufficient cash to repay all the incremental borrowings from our acquisition of Utilimaster. Despite this great progress in our working capital, we still have room for further improvement on our inventory levels. We also have additional potential to enhance efficiency and lower our operating costs. Over the next several months, we will continue to execute on the cost-reduction initiatives we put in place last year and seek out opportunities for additional improvement. We will look to implement processes that will enhance our manufacturing efficiencies and better flex our costs and operations with our current level and mix of revenue.”
Consolidated backlog at March 31 increased to $218.9 million from $217.5 million at March 31, 2009. Compared with the same period last year, backlogs of fire truck and motorhome chassis increased by a combined $16.1 million and specialty vehicle backlog increased by $7.3 million. In addition, the ending backlog includes $35.1 million from the acquisition of Utilimaster in December 2009. These improvements were more than offset by a $39.9 million decrease in APA backlog and a $16.8 million decrease in EVTeam backlog.
Spartan reported operating cash flow of $10.2 million in the first three months of the year, due primarily to reduced working capital requirements. The company ended the first quarter with $4.4 million in cash and cash equivalents, and $12.2 million in long-term debt, an improvement from long-term debt of $35.2 million at Dec. 31, 2009 as Spartan utilized operating cash flow and existing cash balances to eliminate the incremental borrowings following the acquisition of Utilimaster in the fourth quarter of 2009. During the first quarter, Spartan maintained its reduced receivable levels from the end of 2009 while inventory levels improved by approximately $2.2 million from year-end.
Sztykiel concluded: “The first quarter marked a number of key accomplishments for Spartan, both strategically and operationally. As we complete the integration of Utilimaster, we continue to identify and exploit new opportunities to drive our growth. The ability of our flexible operations to adjust to changing market conditions, reduce costs and preserve cash flow, combined with our strong balance sheet, provide Spartan the ability to take advantage of new opportunities as they arise.
”These strengths strategically position Spartan for many future opportunities, as experienced with the recent agreement with Isuzu, whereby the N-Series gasoline chassis and the new commercial walk-in van are key market products with significant future opportunity. We view this new relationship as a starting point in our long-term vision to strategically enter new market niches that fit well with Spartan’s core strengths. In addition, ACT research is forecasting medium-duty vehicle (classes 5-7) production, which is largely tied to health of the housing and construction industries, is expected to see a more steady and gradual increase in production, growing 19% in 2010 and 32% in 2011. This is considered a leading economic indicator that positions Spartan well in the next two years in light of these product launches. 2009 was a year of transformation; 2010 will be a year of implementation.”
Spartan Motors hosted a conference call for analysts and portfolio managers today (April 27) to discuss these results and current business trends. To listen to a live webcast of the call, please visit www.spartanmotors.com click on “Shareholders,” and then on “Webcasts.”
Spartan also will update the financial information on its Roadcast “digital roadshow” for investors. To launch the Spartan Motors Roadcast, please visit www.spartanmotors.com and look for the “Virtual Road Show” link on the right side of the page.
About Spartan Motors
Spartan Motors Inc. designs, engineers and manufactures specialty chassis, specialty vehicles and truck bodies and aftermarket parts for the outdoor recreation/RV, emergency-response, defense, government services, delivery and service markets. The company’s brand names – Spartan, Crimson Fire, Crimson Fire Aerials, Road Rescue and Utilimaster – are known for quality, value, service and being the first to market with innovative products. The company employs approximately 1,600 at facilities in Michigan, Pennsylvania, South Carolina, South Dakota, Indiana and Texas. Spartan reported sales of $430 million in 2009 and is focused on becoming a global leader in the manufacture of specialty vehicles and chassis.
Spartan Motors Inc. announced Thursday (April 22) a strategic alliance with Isuzu Commercial Truck of America Inc., a market leader in Class 3 through 5 trucks, to assemble Isuzu’s gasoline-powered N-series chassis.
In addition, Spartan subsidiary Utilimaster Corp. and Isuzu have agreed to develop a next-generation commercial van, utilizing an Isuzu fuel-efficient diesel powertrain.
“We expect these agreements to be the beginning of a long-term relationship with one of the leading diesel engine and commercial vehicle manufacturers in the world,” said John Sztykiel, president and CEO of Spartan Motors. “This relationship with a market leader like Isuzu enhances Spartan’s ability to leverage our capacity and engineering and manufacturing expertise, which is critical as the landscape for the commercial vehicle market is being transformed by economic, environmental and regulatory forces even as the market is poised for growth.”
Under the terms of the agreement, Spartan will assemble the newly reintroduced Isuzu N-Series chassis, a low-cab-forward chassis powered by a General Motors 6.0-liter V-8 gasoline engine. The chassis will be built to Isuzu’s specifications using a General Motors powertrain at a Spartan assembly facility. Initial production of the N-series chassis is set to begin in the second quarter of 2011.
Shaun Skinner, executive vice president and general manager of Isuzu Commercial Truck of America, commented: “The reintroduction of this product rounds out the traditional Isuzu product line and positions our dealer base to once again offer the broadest line of low-cab-forward solutions.”
In addition to the N-Series chassis assembly agreement, Utilimaster and Isuzu have entered into an exclusive agreement under which Utilimaster will use Isuzu’s diesel chassis to power a next-generation commercial van currently under development by the two companies.
“We have worked extensively with key customers to develop this product from the ground up, and the response to the vehicle thus far has been very encouraging,” said John Marshall, senior vice president of sales and marketing for Utilimaster. “This next-generation vehicle offers best-in-class fuel economy and lower total cost of ownership, while offering important additional features to support commercial van customers, including a distinctly automotive aesthetic, which we believe will set it apart in the market.”
Key specifications for the next-generation van include:
- The van will be rated up to 12,000 pounds GVWR and will be produced in a number of models with cargo capacities up to 600 cubic feet.
- The new line will be powered by an Isuzu 4-cylinder, 3-liter engine that delivers 150 hp.
- The engine is 2010 EPA and CARB OBD compliant, offering best-in-class fuel economy.
- The model 4J truck diesel engine and 6-speed automatic transmission used in the new line offers a B10 engine life of 310,000 miles, which means that 90% of these engines and transmissions will go more than 310,000 miles before requiring major service
- Models will feature lower floors to allow for easier entrance and egress and a taller interior height in the cargo area to allow for walk-through capability in the cab and cargo areas
Spartan and Isuzu said their combined effort is the first in the industry to offer an integrated design for heavy-duty commercial vans specifically designed to reduce the cost of ownership while setting a new standard for fuel economy and reduction of carbon emissions. Spartan and Utilimaster anticipate using the new product line to expand their breadth of its addressable market.
Initial prototypes of the new commercial van are scheduled to be introduced in the third quarter or early in the fourth quarter of 2010, with full production scheduled to commence in the second half of 2011.
“We see our global assembly and product development alliance with Isuzu as a critical step in leveraging our core chassis and vehicle experience, while simultaneously expanding our end market potential,” noted Sztykiel. “Just as the Isuzu relationship is a starting point, not an end point, the same is true with Utilimaster and the commercial van platform; over time it will be about more than delivery and service.
“The new van project has been in development for more than 18 months and represents a significant portion of our R&D spend. It clearly positions Utilimaster for market share gains and a proprietary platform for entering new delivery and service niches, while taking advantage of other market applications over time. This agreement marks the early achievement of some of the promise we saw when we acquired Utilimaster last year and the continuation of the innovation trend that has been one of Spartan’s hallmarks since our founding.”
Spartan Motors Chassis Inc., a subsidiary of Spartan Motors Inc., recognized its top-performing suppliers at its 8th Annual Supplier Conference Wednesday (March 17) in Charlotte, Mich.
“Spartan strives to procure high quality products and services that are delivered on time to support daily operations, but are also innovative and add value to the Spartan Chassis product lines,” Jeremy Wilson, director of supply chain management, stated in a news release. “Spartan’s suppliers play a critical role in ensuring our success in today’s competitive environment.”
The following companies met or exceeded Spartan’s standards of excellence for 2009:
- Allison Transmission, Indianapolis.
- American Cooling Systems, Bloomfield Hills, Mich.
- Bolton Conductive Systems, Walled Lake, Mich.
- Formed Solutions Inc., Holland, Mich.
- Harris Battery Co. Inc., Bolivar, Ohio.
- Professional Metal Works, East Lansing, Mich.
- Redmer Industries, Lansing, Mich.
- Seats Inc., Westerville, Ohio.
- St. Clair Technologies Inc., Wallaceburg, Ontario.
- Titan Wheel Corp., Chicago.
- Vehicle Improvement Products, Antioch, ill.
- Wiley Metal Fabricating Inc, Marion, Ind..
The performance of Spartan’s suppliers is continually assessed and evaluated by the Supplier Performance Action Review Committee (SPARC). To meet Spartan’s standards of excellence, suppliers must meet performance criteria related to quality, delivery, customer support and competitiveness.
The SPARC awards, now in their eighth year, recognized the top 4% of Spartan’s more than 300 suppliers for their ability to perform on time and on budget.
Spartan Motors Inc. announced a planned leadership transition and new appointment to the board of directors aimed at continuing to strengthen the company’s governance and board depth.
According to a news release, the moves include the planned retirement of David Wilson from his position as chairman of the board effective at the 2010 annual meeting. Wilson has been a member of the board since 1996 and has served as chairman since 2002.
“David presided over the board during Spartan’s most rapid period of growth, and under his guidance we have been able to maintain positive earnings, increase sales and position ourselves for future growth,” said John Sztykiel, president and CEO of Spartan Motors. “We are grateful for his vision and leadership, and thank him for his lasting contributions.”
Spartan Motors said the board has elected Hugh Sloan, 69, to become chairman at the 2010 annual meeting. Sloan has been an independent member of Spartan’s board since 2007, serving on the audit and compensation committees. He has over 35 years of experience in the automotive industry, most notably with Woodbridge Foam Corp., a $1 billion global supplier of polyurethane foam, where he served as president, automotive, and deputy chairman of the board, and Budd Canada Inc., where he served as a director, president and general manager.
Sloan serves on the boards of directors of Woodbridge Foam Corp., Manulife Financial and Wescast Industries Inc., where he is lead director.
He is also a former staff assistant to President Richard Nixon. Sloan held a key post in the Nixon administration as treasurer of Nixon’s re-election campaign. According to the Washington Post, Sloan once said he never wrote a Watergate book because he thought it would be wrong “to make money off, in essence, sending people to jail.”
Sloan quit his job at the Committee for the Re-election of the President less than a month after the Watergate burglary. Sloan later testified against his former co-workers and became a critical source to Post reporters Carl Bernstein and Bob Woodward.
Before taking the campaign treasurer’s post, Sloan worked at the Republican National Committee and as a scheduling aide to the president.
Sloan also is a former trustee of Princeton University and served as chairman of the Automotive Parts Manufacturers Association of Canada (APMA) and as a founding director of the Original Equipment Suppliers Association (OESA) in the United States.
“The legacy David built during his tenure will shape the direction of Spartan for years to come,” said Sloan. “I am honored to have the opportunity to build on his work as we enter new markets with the integration of our acquisition of Utilimaster, and continue pursuing new avenues of growth.”
Spartan also announced the appointment of Richard F. (Rick) Dauch, president and CEO of Acument Global Technologies Inc., to the company’s board of directors. Dauch will serve as an independent director.
Spartan Motors Inc. today (Feb. 18) announced results for its 2009 fourth quarter and full year, which included the completion of the company’s acquisition of Utilimaster on Nov. 30.
According to a news release, fourth-quarter highlights for the Charlotte, Mich.-based company include:
- Net sales of $100.5 million.
- Gross margin of 14.9% of sales.
- Operating expenses of $15.0 million (15% of sales).
- Total one-time acquisition-related charges of $1.2 million.
- Consolidated backlog of $247.6 million at year end 2009.
“We are pleased in some respects with the accomplishments of our team during a very demanding quarter,” said John Sztykiel, president and CEO of Spartan Motors. “On the positive side, we completed the purchase of Utilimaster and began our integration efforts, while continuing to align our core business to the current level of demand. On a negative note, we lost money, which is something we do not do often. That said, we are starting to see meaningful improvements in some markets, such as fire trucks and motorhomes, as consolidated backlog, excluding the new Utilimaster acquisition, rose 25.7% from the prior year and 35.6% from the third quarter of 2009.”
Consolidated net sales for the quarter were $100.5 million, up 12% sequentially from Q3 of 2009 due to the incremental Utilimaster sales, which were partially offset by lower service parts and assemblies (SPA) sales. Compared with the fourth quarter of 2008, net sales fell 31.3% due mainly to the completion of a large-scale defense vehicle contract in 2008, as well as lower SPA sales in the current quarter.
By contrast, Spartan’s EVTeam operating segment, which consists of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries, reported a 13.3% year-over-year increase in sales for the 2009 fourth quarter. Sales of fire truck chassis in the quarter also increased 15% compared to the same period in 2008. Likewise, Spartan’s chassis sales to the Class A diesel motorhome market more than doubled in the quarter, driven by new products and recent improvements in the recreational vehicle market.
Net loss for the quarter was $400,000, which included one-time pre-tax charges of $1.2 million related to Spartan’s acquisition of Utilimaster.
For the full year, Spartan reported net sales of $429.9 million, compared with net sales of $844.4 million in 2008. The decline in sales for the year was primarily the result of the completion of a large defense order in 2008 combined with softness in the current motorhome market. Gross profit fell with the lower revenue level, but as a percent of sales, gross margin increased to 19% in 2009, up from 17.5% in 2008, due mainly to a shift in mix toward higher margin products.
Income from operations for the year was $18.6 million, compared with $68.7 million in 2008. On the bottom line, Spartan reported net income of $11.8 million for 2009, versus net income of $42.7 million in the prior year.
Backlog at Dec. 31, stood at $247.6 million, up 45.7% from $169.9 million at Dec. 31, 2008. Excluding the $34.1 million backlog from Utilimaster, Spartan’s total backlog increased by 25.7% over the prior year. Also excluding backlogs for SPA, which were not included in consolidated backlog in 2008, total backlogs would have increased 18.9% from the prior year. The improvement in backlog was driven by significantly improved order flow in motorhome and fire truck chassis ahead of updated emissions standards scheduled to take effect in 2010.