Spartan Motors Announces Third-Quarter Results
26 October 2000
Spartan Motors Announces Third-Quarter Results
CHARLOTTE, Mich., Oct. 26 Spartan Motors, Inc.
today reported its results for the third quarter and nine
months ended Sept. 30, 2000.
The Charlotte, Mich.-based manufacturer of custom chassis and emergency
vehicles said that net sales decreased in the third quarter to $53.0 million,
compared with $76.3 million during the same period a year ago. Sales figures
do not include revenue from its school bus operations, Carpenter Industries,
which the Company decided to stop funding during the quarter and reported as
discontinued operations. Spartan Motors said the sales decrease was due to
softness in the recreational vehicle market.
The Company reported a loss from continuing operations of $1.7 million, or
$0.15 per share, for the third quarter of 2000, compared with net earnings
from continuing operations of $2.6 million, or $0.21 per share, during the
same quarter in 1999. Spartan Motors attributed portions of these third
quarter losses to an after-tax charge of approximately $2.1 million for the
write-down of excess chassis inventory related to the school bus business,
Spartan's exit from the transit bus business, and softness in the RV market.
Spartan reported a loss from operations of its discontinued subsidiary,
Carpenter Industries, of $2.1 million, or $0.19 per share, compared with a
loss of $1.7 million, or $0.13 per share, in 1999. In addition, the Company
reported a loss on the closure of Carpenter of $6.1 million, or $0.54 per
share, during the third quarter of 2000, reflecting its decision to exit the
school bus business.
"The impact of Carpenter combined with a downturn in the market for Class
A motorhomes made for a disappointing third quarter," said John Sztykiel,
president and chief operating officer of Spartan Motors. "Our board's recent
decision to halt funding for Carpenter closes a painful chapter in our
corporate history, but it allows us to focus on our core competencies once
again and begin to look for growth opportunities that complement our key
strengths."
"The Carpenter issue is behind us now, and we expect to post a solid
fourth quarter. The consolidation of our facilities and the continuing
reduction of our inventory are key to this progress, and we look forward to
getting our results back on track."
For the nine months ended Sept. 30, 2000, Spartan Motors said sales from
continuing operations were $194.1 million compared to $214.7 million during
the same period in 1999.
The Company reported earnings from continuing operations of $3.0 million,
or $0.26 per share, during the first nine months of 2000, compared to
$7.5 million, or $0.60 per share, during the same period of 1999. Spartan
Motors posted a loss from operations of its discontinued subsidiary, Carpenter
Industries, of $3.9 million, or $0.33 per share, for the first nine months of
2000, compared with a loss of $4.1 million, or $0.33 per share, for the same
period of 1999. In addition, the Company reported a loss on the closure of
Carpenter of $6.1 million, or $0.52 per share, during the nine months ended
Sept. 30, 2000.
Sales of the Company's custom RV chassis were lower during the third
quarter as the industry continued to experience a softening in sales of Class
A motorhomes. Sztykiel said the market appears to be rebounding and
fourth-quarter sales already look stronger. Spartan Motors plans to introduce
some new initiatives at the upcoming Recreational Vehicle Industry Association
(RVIA) show November 28-30.
"Our strength as a supplier comes from our ability to think like a
customer," Sztykiel said. "We continue to see opportunities for growth in the
RV industry, and will remain focused on leveraging our expertise in building
custom chassis to grow sales."
Spartan's EVTeam, which consists of three emergency vehicle subsidiaries,
posted a sales increase of 6.8 percent in the third quarter of 2000 compared
to the same quarter in 1999. As part of the Company's continued efforts to
improve the future profitability of the EVTeam, Spartan Motors has named Dave
Friar to serve as the new director of operations at Quality Manufacturing and
industry veteran Charles Drake to serve as president of Road Rescue.
"We have just begun to scratch the surface in the emergency vehicle
industry, whether it is ambulances or fire apparatus," Sztykiel said. "Our
products enjoy a fine reputation for quality and affordability, and we
continue to pick up market share each quarter. During the just-completed
quarter, Spartan shipped its first custom ambulance chassis, marking its entry
into a new market that draws on its core strengths. We have been successful
at increasing penetration of our custom products into a market that has been
dominated by mass producers, and must focus our efforts to ensure this trend
continues."
Commenting on the financial results, Executive Vice President and Chief
Financial Officer Rich Schalter added: "We continue to make significant
strides in reducing our inventories and controlling operational costs.
Severing our ties with Carpenter will allow us to utilize our cash flow for
such initiatives as growing our core businesses and continuing the authorized
stock repurchase plan."
Spartan Motors, Inc. and Subsidiaries
Consolidated Income Statements
Three Months Ended September 30, 2000 and 1999
September 30, 1999 September 30, 2000 Change-fav/(unfav)
$-000 % $-000 % $-000 %
Sales 76,336 53,045 (23,291)
Cost of Sales 65,046 49,168 15,878
Gross Profit 11,290 14.8 3,877 7.3 (7,413) (65.7)
Operating Expenses:
Research and
Development 1,637 2.1 1,599 3.0 38 2.3
Selling,
General and
Administration 5,218 6.9 4,527 8.5 691 13.2
Total Operating
Expenses 6,855 9.0 6,126 11.5 729 10.6
Operating Income
(Loss) 4,435 5.8 (2,249) (4.2) (6,684) (150.7)
Other Income (Expense):
Interest Expense (408) (0.5) (336) (0.6) 72 (17.6)
Interest and
Other Income 145 0.2 167 0.2 22 15.2
Total Other Income
(Expense) (263) (0.3) (169) (0.4) 94 (35.7)
Earnings (Loss) before
Taxes 4,172 5.5 (2,418) (4.6) (6,590) (158.0)
Taxes 1,553 (686)
Earnings (Loss)
from Continuing
Operations 2,619 3.4 (1,732) (3.3) (4,351) (166.1)
Discontinued Operations:
Loss from Operations
of Carpenter 1,690 2.2 2,149 4.1 459 27.2
Loss on Disposal
of Carpenter 6,099 11.5 6,099 0.0
Net Earnings (Loss) 929 1.2 (9,980) (18.8) (10,909) (1174.3)
Basic and Diluted Net Earnings (Loss) per Share:
Earnings (Loss)
from Continuing
Operations 0.21 (0.15) (0.36) (1.71)
Discontinued Operations:
Loss from Operations
of Carpenter 0.13 0.19 0.06 0.41
Loss on Disposal
of Carpenter -- 0.54 0.54 --
Basic and Diluted Net Earnings (Loss)
per Share 0.08 (0.88) (0.96) (12.70)
Basic weighted avg.
common shares
outstanding 12,535 11,318
Diluted weighted avg.
common shares
outstanding 12,556 11,324
Spartan Motors, Inc. and Subsidiaries
Consolidated Income Statements
Nine Months Ended September 30, 2000 and 1999
September 30, 1999 September 30, 2000 Change fav/(unfav)
$-000 % $-000 % $-000 %
Sales 214,686 194,102 (20,584)
Cost of Sales 182,448 169,142 13,306
Gross Profit 32,238 15.0 24,960 12.9 ( 7,278) (22.6)
Operating Expenses:
Research and
Development 4,866 2.3 4,956 2.6 (90) (1.8)
Selling, General and
Administration 14,777 6.8 14,557 7.5 220 1.5
Total Operating
Expenses 19,643 9.1 19,513 10.1 130 0.7
Operating Income 12,595 5.9 5,447 2.8 (7,148) (56.8)
Other Income (Expense):
Interest
Expense (1,180) (0.5) (864) (0.4) 316 (26.8)
Interest and
Other Income 298 0.1 350 0.1 52 17.4
Total Other Income
(Expense) (882) (0.4) (514) (0.3) 368 (41.7)
Earnings before
Taxes 11,713 5.5 4,933 2.5 (6,780) (57.9)
Taxes 4,243 2.0 1,930 1.0 2,313 54.5
Earnings from Continuing
Operations 7,470 3.5 3,003 1.5 (4,467) (59.8)
Discontinued Operations:
Loss from Operations of
Carpenter 4,094 3,901 193 4.7
Loss on Disposal of
Carpenter 6,099 (6,099) 0.0
Net Earnings
(Loss) 3,376 1.6 (6,997) (3.6) (10,373) (307.3)
Basic and Diluted Net Earnings (Loss) per Share:
Earnings (Loss)
from Continuing
Operations 0.60 0.26 (0.34) (0.57)
Discontinued Operations:
Loss from Operations of
Carpenter 0.33 0.33 0.01 0.02
Loss on Disposal of
Carpenter -- 0.52 0.52 --
Basic and Diluted Net Earnings
(Loss) per Share 0.27 (0.59) (0.87) (3.17)
Basic weighted avg. common shares
outstanding 12,535 11,737
Diluted weighted avg. common shares
outstanding 12,558 12,749