UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February, 15, 2007
SPARTAN MOTORS, INC
(Exact name of registrant as
specified in its charter)
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Michigan |
0-13611 |
38-2078923 |
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1165 Reynolds Road |
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Registrant's telephone number,
including area code: (517) 543-6400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 |
Results of Operations and Financial Condition. |
On February, 15, 2007, Spartan Motors, Inc. issued a press release concerning its financial results for the quarter ended December 31, 2007. The press release is attached to this Form 8-K as Exhibit 99.1 and is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.
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Item 9.01 |
Financial Statements and Exhibits. |
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(d) |
Exhibits: |
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99.1 |
Spartan Motors, Inc. Press Release dated February, 15, 2007. This Exhibit is furnished to, and not filed with, the Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SPARTAN MOTORS, INC. |
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Date: February, 15, 2007 |
By /s/ James W. Knapp |
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James W. Knapp |
EXHIBIT INDEX
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Exhibit Number |
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Document |
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99.1 |
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Spartan Motors, Inc. Press Release dated February, 15, 2007. |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Spartan Motors Reports Best-Ever Fourth Quarter and Year End Results
Sales in All Segments Grow; Consolidated Backlog Increases 38.3 Percent
CHARLOTTE, Michigan, Feb. 15, 2007 - Spartan Motors, Inc. (NASDAQ: SPAR) today reported its earnings more than tripled for the fourth quarter ended Dec. 31, 2006, boosted by net sales gains of 63.8 percent.
Spartan had 2006 fourth quarter net earnings of $3.3 million, or $0.16 per diluted share, compared with net earnings of $986,000, or $0.05 per diluted share, in the fourth quarter of 2005. The 2006 fourth quarter net earnings included a non-cash charge of $2.1 million, or approximately $0.10 per share, related to a write-off of goodwill for Spartan's ambulance subsidiary, Road Rescue.
Net sales for the fourth quarter 2006 increased to a record $123.6 million, compared with net sales of $75.5 million for the fourth quarter of 2005. All financial information includes the adjustment for the Company's 3-for-2 stock split in Dec. 2006.
During its annual evaluation of subsidiary goodwill in the 2006 fourth quarter, the company concluded the goodwill for its Road Rescue subsidiary no longer had value. The write-off of the subsidiary's goodwill was a one-time charge to net earnings.
Spartan, a leading manufacturer of custom vehicle chassis and emergency-rescue vehicles, attributed its best-ever annual results to increased chassis sales to its RV, fire truck and specialty vehicle customers, as well as increased sales at its EVTeam companies.
"We had a strong fourth quarter and year in terms of improved execution across all our subsidiaries," said John Sztykiel, president and CEO of Spartan Motors. In addition, the strength of our brands continues to increase and we are confident in our momentum based on our record-level sales and backlog.
"It is important to note our growth in 2006 increased without any new significant product introductions. We are in process of introducing two new significant products to serve the fire apparatus market at Crimson Fire and Spartan Chassis in 2007, which we anticipate will make positive contributions into 2008. We are becoming a more disciplined group of people focused on becoming more effective and efficient."
For the year ended Dec. 31, 2006, Spartan's sales increased 29.8 percent and net earnings increased 102.9 percent compared to the same period last year. Spartan reported record net earnings of $16.8 million, or $0.83 per diluted share, on net sales of $445.4 million for 2006. Net earnings for the year ended 2006 include the non-cash charge related to the write-off of goodwill in the fourth quarter of 2006.
Spartan reported its gross margin improved to 16.8 percent in the fourth quarter of 2006, compared with 14.8 percent for the same period in 2005, reflecting higher sales and improved product mix, pricing, overhead utilization and labor efficiencies. Operating margin also improved to 5.0 percent in the fourth quarter of 2006, compared with 1.9 percent in the same quarter of 2005.
-more-
Spartan Motors / Page 2 of 7
Spartan Motors' consolidated backlog at the end of 2006 increased 38.3 percent over last year's period to approximately $232.1 million. Spartan Motors anticipates filling the current backlog orders by the end of 2007.
On a consolidated basis, Spartan posted a return on invested capital (ROIC) of 12.3 percent in the fourth quarter of 2006, a 200.0 percent increase compared to ROIC of 4.1 percent for the same quarter in 2005. (Spartan defines return on invested capital as operating income less taxes, on an annualized basis, divided by total shareholders' equity.) ROIC for 2006 was 15.7 percent compared to ROIC of 10.4 percent in 2005.
The company ended the quarter with $25.2 million in long-term debt, reflecting its investments in Spartan Chassis facilities and growth in working capital to support increased sales. Spartan reported $13.8 million in cash and cash equivalents at the end of 2006.
"We have always set aggressive goals when it comes to return on capital and are pleased that our performance in 2006 - both in terms of earnings and sales growth as well as return on invested capital - is being rewarded through share appreciation and increased value for our shareholders," said Jim Knapp, CFO of Spartan Motors.
Spartan Chassis
Earnings at Spartan Chassis, the company's largest operating subsidiary, improved 143.6 percent in the current fourth quarter compared to the same period of last year. Sales at Spartan Chassis increased 75.7 percent to $113.7 million, or 92.0 percent of total sales, and the subsidiary's backlog as of the end of the quarter increased 67.6 percent compared to last year.
Despite the downturn in the RV industry during the year, Spartan RV chassis sales increased 7.9 percent in 2006, compared with a 13.7 percent decline in industry sales for Class A motorhomes during the same period, according to the Recreational Vehicle Industry Association (RVIA). Spartan's RV chassis sales in the 2006 fourth quarter increased 32.4 percent compared to the prior year. Backlog for RV chassis decreased 9.3 percent year-over-year to $28.2 million as of Dec. 31, 2006.
Fourth quarter sales of fire truck chassis increased 28.1 percent year-over-year and backlog at the end of the quarter for fire truck chassis was $84.5 million, a 64.9 percent increase compared with last year. Sales of specialty vehicles chassis, including Spartan's subcontracts for Force Protection's Cougar and BAE Systems' ILAV military vehicles, increased 876.6 percent in the fourth quarter of 2006. At the end of the quarter, backlog for specialty vehicles was at $49.7 million, an increase of 240.2 percent compared with last year.
"Industry analysts are forecasting an RV industry recovery late in the second quarter of 2007," said Sztykiel. "We seem to be accelerating at a faster pace than the market based on our order intake for motorhome chassis in the first quarter of 2007, which is already higher than the previous quarter and compared to the first quarter of 2006. With our market share gains, we are in a good position to capitalize on this recovery. Spartan Chassis is also addressing the mid- to entry-level market of Class A motorhomes through strategic market presence.
"Sales of fire truck chassis remain near record levels and we are in the process of solving a minor production constraint with a new cab assembly and paint facility coming on-line in June 2007. We are optimistic about our specialty vehicle market, now 14.5 percent of consolidated annual sales, and continue to work effectively and efficiently with Force Protection and BAE Systems, our two primary military customers, as they seek new contracts from the U.S. military."
Emergency Vehicle Team (EVTeam)
Spartan's EVTeam operating group, consisting of its Crimson Fire, Crimson Fire Aerials and Road
Spartan Motors / Page 3 of 7
Rescue subsidiaries, reported an increase in 2006 fourth quarter sales by 4.7 percent compared to the same period last year. The EVTeam reported backlog of $69.7 million at the end of the quarter, which is on par with its backlog in the fourth quarter of 2005."Crimson Fire, along with Crimson Fire Aerials, continues to pull through Spartan-brand chassis as their sales grow," Sztykiel said. "Since every Crimson Fire Aerial rides on a Spartan chassis, its profitability is determined, in part, by timely deliveries of Spartan chassis. For the EVTeam, 2006 was a year of solid progress and we expect even more progress in 2007."
Future Outlook
"Our future performance is based on being effective - doing the right things, and efficient - doing things right, while building a culture of excellence across all of our operating subsidiaries," said Sztykiel. "This focus, along with capital investments in production capacity at Spartan Chassis, ongoing product development and the diversification of our business model into RV, emergency-rescue and specialty vehicles, bodes well for 2007 and beyond."
Conference Call, Webcast and Presentation
Spartan Motors will host a conference call for analysts and portfolio managers at 10 a.m. ET today to discuss these results and current business trends. To listen to a live webcast of the call, please visit http://www.spartanmotors.com/webcasts.asp.
About Spartan Motors
Spartan Motors, Inc. (www.spartanmotors.com) designs, engineers and manufactures custom chassis and vehicles for the recreational vehicle, fire truck, ambulance, emergency-rescue and specialty vehicle markets. The Company's brand names - SpartanTM, Crimson FireTM, Crimson Fire AerialsTM, and Road RescueTM - are known for quality, value, service and being the first to market with innovative products. The Company employs approximately 1,100 at facilities in Michigan, Pennsylvania, South Carolina, and South Dakota. Spartan reported sales of $445 million in 2006 and is focused on becoming the premier manufacturer of specialty vehicles and chassis in North America.
This release contains forward-looking statements, including, without limitation, statements concerning our business, future plans and objectives and the performance of our products. These forward-looking statements involve certain risks and uncertainties that ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Technical complications may arise that could prevent the prompt implementation of the plans outlined above. The company cautions that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in the company's Annual Report on Form 10-K filing and other filings with the United States Securities and Exchange Commission (available at http://www.sec.gov). Government contracts and subcontracts typically involve long payment and purchase cycles, competitive bidding, qualification requirements, delays or changes in funding, extensive specification deve lopment and changes, price negotiations and milestone requirements. An announced award of a governmental contract is not equivalent to a finalized executed contract and does not assure that orders will be issued and filled. Government agencies also often retain some portion of fees payable upon completion of a project and collection of contract fees may be delayed for long periods, which can negatively impact both prime contractors and subcontractors. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise, except as required by law.
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CONTACT: |
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John Sztykiel, CEO, or Jim Knapp, CFO |
Jeff Lambert or Ryan McGrath |
Spartan Motors / Page 4 of 7
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Spartan Motors, Inc. and Subsidiaries |
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December 31, 2006 |
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December 31, 2005 |
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$-000- |
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% |
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$-000- |
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% |
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Sales |
123,608 |
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75,450 |
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Cost of Products Sold |
102,840 |
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64,301 |
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Gross Profit |
20,768 |
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16.8 |
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11,149 |
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14.8 |
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Operating Expenses: |
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Research and Development |
3,720 |
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3.0 |
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2,579 |
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3.4 |
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Selling, General and Administrative |
8,779 |
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7.1 |
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7,164 |
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9.5 |
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Goodwill Impairment |
2,086 |
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1.7 |
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Total Operating Expenses |
14,585 |
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11.8 |
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9,743 |
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12.9 |
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Operating Income |
6,183 |
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5.0 |
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1,406 |
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1.9 |
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Other Income (Expense): |
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Interest Expense |
(196 |
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(0.2 |
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(34 |
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(0.0 |
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Interest and Other Income |
291 |
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0.3 |
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275 |
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0.3 |
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Total Other Income (Expense) |
95 |
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0.1 |
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241 |
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0.3 |
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Earnings before Taxes on Income |
6,278 |
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5.1 |
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1,647 |
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2.2 |
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Taxes on Income |
2,998 |
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2.4 |
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661 |
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0.9 |
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Net Earnings |
3,280 |
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2.7 |
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986 |
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1.3 |
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Basic Net Earnings per Share |
0.16 |
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0.05 |
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Diluted Net Earnings per Share |
0.16 |
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0.05 |
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Basic Weighted Average Common Shares Outstanding |
20,621 |
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18,950 |
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Diluted Weighted Average Common Shares Outstanding |
20,957 |
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19,284 |
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Spartan Motors / Page 5 of 7
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Spartan Motors, Inc. and Subsidiaries |
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December 31, 2006 |
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December 31, 2005 |
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$-000- |
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% |
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$-000- |
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% |
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Sales |
445,378 |
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343,007 |
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Cost of Products Sold |
372,002 |
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294,232 |
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Gross Profit |
73,376 |
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16.5 |
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48,775 |
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14.2 |
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Operating Expenses: |
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Research and Development |
12,622 |
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2.8 |
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9,431 |
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2.7 |
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Selling, General and Administrative |
31,360 |
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7.1 |
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26,693 |
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7.8 |
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Goodwill Impairment |
2,086 |
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0.5 |
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Total Operating Expenses |
46,068 |
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10.4 |
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36,124 |
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10.5 |
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Operating Income |
27,308 |
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6.1 |
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12,651 |
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3.7 |
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Other Income (Expense): |
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Interest Expense |
(347 |
) |
(0.1 |
) |
(141 |
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(0.0 |
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Interest and Other Income |
1,011 |
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0.3 |
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859 |
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0.2 |
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Total Other Income (Expense) |
664 |
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0.2 |
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718 |
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0.2 |
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Earnings before Taxes on Income |
27,972 |
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6.3 |
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13,369 |
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3.9 |
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Taxes on Income |
11,144 |
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2.5 |
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5,077 |
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1.5 |
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Net Earnings |
16,828 |
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3.8 |
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8,292 |
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2.4 |
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Basic Net Earnings per Share |
0.85 |
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0.44 |
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Diluted Net Earnings per Share |
0.83 |
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0.43 |
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Basic Weighted Average Common Shares Outstanding |
19,737 |
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18,836 |
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Diluted Weighted Average Common Shares Outstanding |
20,168 |
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19,212 |
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Spartan Motors / Page 6 of 7
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Spartan Motors, Inc. and Subsidiaries |
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December 31, 2006 |
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December 31, 2005 |
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$-000 |
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$-000 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
13,835 |
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$ |
9,702 |
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Marketable securities |
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- |
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1,988 |
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Accounts receivable, net |
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62,620 |
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37,017 |
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Inventories |
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64,173 |
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44,265 |
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Deferred income tax assets |
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4,567 |
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|
3,745 |
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Taxes receivable |
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- |
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|
990 |
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Other current assets |
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12,782 |
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|
1,949 |
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Total current assets |
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157,977 |
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|
99,656 |
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Property, plant and equipment, net |
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29,659 |
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|
18,478 |
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Goodwill |
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2,457 |
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|
4,543 |
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Other assets |
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555 |
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|
531 |
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Total assets |
$ |
190,648 |
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$ |
123,208 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
30,704 |
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$ |
20,746 |
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Accrued warranty |
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6,381 |
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4,503 |
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Accrued compensation and related taxes |
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7,712 |
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|
4,241 |
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Accrued vacation |
|
1,483 |
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|
1,189 |
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Deposits from customers |
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7,465 |
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|
13,640 |
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Taxes on income |
|
1,566 |
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- |
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Other current liabilities and accrued expenses |
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6,062 |
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|
4,608 |
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Current portion of long-term debt |
|
521 |
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|
53 |
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Total current liabilities |
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61,894 |
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|
48,980 |
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Long-term debt, less current portion |
|
25,218 |
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|
1,317 |
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Deferred income tax liabilities |
|
355 |
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|
309 |
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Shareholders' equity: |
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Preferred stock |
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- |
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- |
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Common stock |
|
141 |
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|
126 |
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Additional paid in capital |
|
54,409 |
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|
37,040 |
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Retained earnings |
|
48,631 |
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|
35,448 |
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Accumulated other comprehensive loss |
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- |
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|
(12 |
) |
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Total shareholders' equity |
|
103,181 |
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|
72,602 |
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|
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Total liabilities and shareholders' equity |
$ |
190,648 |
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$ |
123,208 |
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Spartan Motors / Page 7 of 7
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Spartan Motors, Inc. and Subsidiaries |
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Three Months Ended December 31, 2006 (amounts in thousands) |
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Business Segments |
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Chassis |
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EVTeam |
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Other |
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Consolidated |
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Motorhome Chassis Sales |
47,574 |
47,574 |
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Fire Truck Chassis Sales |
28,473 |
(6,593 |
) |
21,880 |
||||||
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EVTeam Product Sales |
16,490 |
16,490 |
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Other Product Sales |
37,664 |
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|
37,664 |
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Total Net Sales |
113,711 |
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|
16,490 |
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|
(6,593 |
) |
|
123,608 |
|
Interest Expense (Income) |
307 |
(111 |
) |
196 |
||||||
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Depreciation Expense |
350 |
337 |
104 |
791 |
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Segment Net Earnings (Loss) |
7,456 |
(3,112 |
) |
(1,064 |
) |
3,280 |
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Twelve Months Ended December 31, 2006 (amounts in thousands) |
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Business Segments |
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Chassis |
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EVTeam |
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Other |
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Consolidated |
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Motorhome Chassis Sales |
204,165 |
204,165 |
||||||||
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Fire Truck Chassis Sales |
108,302 |
(23,631 |
) |
84,671 |
||||||
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EVTeam Product Sales |
77,365 |
77,365 |
||||||||
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Other Product Sales |
79,177 |
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|
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|
|
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|
79,177 |
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Total Net Sales |
391,644 |
|
|
77,365 |
|
|
(23,631 |
) |
|
445,378 |
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Interest Expense (Income) |
1 |
942 |
(596 |
) |
347 |
|||||
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Depreciation Expense |
1,142 |
1,298 |
423 |
2,863 |
||||||
|
Segment Net Earnings (Loss) |
24,681 |
(5,453 |
) |
(2,400 |
) |
16,828 |
||||
|
Period End Backlog (amounts in thousands) |
|||||||||
|
December 31, 2005 |
|
March 31, 2006 |
|
June 30, 2006 |
|
September 30, 2006 |
|
December 31, 2006 |
|
|
Motorhome Chassis * |
31,075 |
38,640 |
29,141 |
27,416 |
28,198 |
||||
|
Fire Truck Chassis * |
51,201 |
69,008 |
112,874 |
81,889 |
84,445 |
||||
|
Other Product * |
14,616 |
|
7,329 |
|
31,636 |
|
56,175 |
|
49,729 |
|
Total Chassis |
96,892 |
114,977 |
173,651 |
165,480 |
162,372 |
||||
|
EVTeam Product * |
70,932 |
|
66,741 |
|
68,176 |
|
65,387 |
|
69,715 |
|
Total Backlog |
167,824 |
|
181,718 |
|
241,827 |
|
230,867 |
|
232,087 |
|
* Anticipated time to fill backlog orders; 2 months or less for motorhome chassis and 4-10 months for fire truck chassis, other product and EVTeam product |
|||||||||