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): May 1, 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 May 1, 2007, Spartan Motors, Inc. issued a press release concerning its financial results for the quarter ended March 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 May 1, 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: May 1, 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 May 1, 2007. |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Spartan Motors Posts Record First Quarter Sales and Profits
Earnings Increase 60.8 Percent; Order Backlog Up 37.6 Percent
CHARLOTTE, Michigan, May 1, 2007 - Spartan Motors, Inc. (NASDAQ: SPAR) reported record quarterly results, including a 37.8 percent year-over-year increase in net sales and a 60.8 percent year-over-year increase in net earnings for the first quarter ended March 31, 2007.
Spartan, a leading manufacturer of custom vehicle chassis and emergency-rescue vehicles, said net earnings grew to a record $7.2 million, or $0.33 per diluted share, on net sales of $142.9 million in the 2007 first quarter, compared with net earnings of $4.5 million, or $0.23 per diluted share, on net sales of $103.7 million in the first quarter of 2006.
Spartan attributed its strong profitability to improved execution of its strategic plan within its various markets. All financial information includes the adjustment for the Company's 3-for-2 stock split in Dec. 2006.
"We have begun 2007 in an excellent position, encouraged by our best-ever quarterly results on both the top and bottom line and thankful for our success," said John Sztykiel, president and CEO of Spartan Motors. "In addition, we are in the process of adding three manufacturing facilities to our Spartan Chassis operations, expanding our production capacity to allow us to capitalize on our growing backlog and become more effective and efficient in our execution.
"Though the RV industry is currently doing well and our sales and backlog for motorhome chassis increased in the first quarter of 2007 compared to the fourth quarter of 2006, we do have some concerns about the future impact of rising fuel prices on the overall RV market."
Spartan's gross margin improved to 17.3 percent in the first quarter of 2007, compared with 16.2 percent for the same period in 2006 and 16.8 percent in the fourth quarter of 2006, reflecting higher sales and improved product mix, overhead utilization and labor efficiencies. Operating margin also improved to 8.0 percent in the first quarter of 2007, compared with 6.6 percent in the same quarter of 2006.
Spartan Motors' consolidated backlog increased 37.6 percent over the same period of last year to approximately $250.1 million as of March 31, 2007, the largest backlog in company history. Spartan Motors anticipates filling its current backlog orders by the end of 2007.
"We are confident that our innovation, speed to market and current momentum in each business unit will help us grow market share in our existing products and support our new product initiatives during the remainder of 2007," Sztykiel said.
"We are expanding on a company-wide basis, but also have the market trend-winds at our backs. The aging U.S. population, with 11,000 Americans turning 50 each day, remains an opportunity for the RV and ambulance markets. More than 70 percent of U.S. casualties in Iraq are from improvised explosive devices (IEDs) and mine-resistant ambush-protected vehicles are protecting our troops from IEDs on the
-more-
Spartan Motors / Page 2 of 6
battlefield. Every 32 seconds there is an 'all-hazards, first-response call' to a U.S. fire department and this level is increasing, expanding the market for our emergency-rescue products."
On a consolidated basis, Spartan posted its best-ever quarterly return on invested capital (ROIC) of 25.7 percent in the first quarter of 2007, a 17.9 percent increase compared to ROIC of 21.8 percent for the same quarter in 2006. (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 $21.1 million in long-term debt, which includes financing for Spartan Chassis' new and renovated facilities and growth in working capital to support its increased sales. Spartan reported $1.3 million in cash and cash equivalents at the end of the first quarter of 2007.
"I want to thank of all of our team members at Spartan Chassis, Crimson Fire, Crimson Fire Aerials and Road Rescue for their focus on becoming efficient and effective," Sztykiel said.
Spartan Chassis
Sales at Spartan Chassis, the company's largest operating unit, increased 44.5 percent to $128.0 million, or 86.0 percent of Spartan Motors' total sales. Earnings at Spartan Chassis improved 50.0 percent in the current first quarter compared to the same quarter of last year , and the unit's backlog as of March 31, 2007 increased 52.4 percent compared to last year.
Sales of fire truck chassis increased 37.5 percent in the first quarter of 2007 compared to last year. Backlog for fire truck chassis at the end of the first quarter was $84.4 million, a 22.3 percent increase compared with last year. Other product sales, including specialty vehicle chassis and Spartan's subcontracts for military vehicle customers, increased 251.6 percent in the first quarter of 2007, and backlog for specialty vehicles increased 625.6 percent to $53.2 million as of March 31, 2007.
Spartan's RV chassis sales increased 2.9 percent in the first quarter, driven in part by an 8.0 percent increase in industry wholesale shipments for Class A motorhomes in the first two months of 2007, the latest industry data available from the Recreational Vehicle Industry Association (RVIA). Backlog for RV chassis decreased 2.5 percent year-over-year to $37.7 million as of March 31, 2007, though it increased 33.6 percent compared to RV chassis backlog at the end of the fourth quarter of 2006.
"Spartan Chassis as a whole continues to execute, as evidenced by its increasing profitability, while also growing market share, as seen in our record backlog," said Sztykiel. "Industry shipments for motorhomes increased in early 2007. This momentum may offset the possibility of higher fuel prices as we move into early summer. As we continue to pursue market share in RV, we expect to continue to see increased sales as more OEMs adopt a Spartan chassis as their platform."
Sztykiel continued: "Spartan Chassis unveiled a new product system at FDIC 2007 allowing fire truck customers to customize every chassis from two base models of chassis. This platform concept is a first for the industry, and we believe it will eventually become an industry standard, as it provides the customer with exactly what they want at greater operational efficiency.
"We also received several large orders from our military vehicle strategic partners in the last several months, including those for the important Mine Resistant Ambush Protected (MRAP) program, and we remain optimistic about our prospects as a supplier to this new market."
Emergency Vehicle Team (EVTeam)
Spartan's EVTeam operating unit, consisting of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries, reported a sales increase of 8.6 percent in the 2007 first quarter, as compared to the same quarter of 2006. The EVTeam reported backlog of $74.8 million at the end of the quarter, a 12.1 percent increase compared to the unit's backlog in the first quarter of 2006.
Spartan Motors / Page 3 of 6
"The first quarter was another step in the right direction for the EVTeam," Sztykiel said. "Our chassis production constraint affecting Crimson Fire and Crimson Fire Aerials will be solved by our new Spartan cab and chassis plant opening in the next month. All three EVTeam companies had several new products on display at FDIC 2007, including Crimson Fire Aerial's new, cost-effective Boomer, which is targeted to the 25,000 fire departments in the U.S. that do not have an aerial or waterway device due to cost."
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 speci fication development 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 6
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Spartan Motors, Inc. and Subsidiaries |
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March 31, 2007 |
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December 31, 2006 |
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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 |
$ |
1,291 |
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$ |
13,835 |
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Accounts receivable, net |
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79,243 |
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62,620 |
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Inventories |
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72,793 |
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64,173 |
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Deferred income tax assets |
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4,371 |
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4,567 |
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Deposits on engines |
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4,742 |
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10,900 |
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Other current assets |
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1,706 |
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1,882 |
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Total current assets |
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164,146 |
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157,977 |
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Property, plant and equipment, net |
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35,874 |
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29,659 |
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Goodwill |
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2,457 |
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2,457 |
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Other assets |
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521 |
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555 |
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Total assets |
$ |
202,998 |
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$ |
190,648 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
36,324 |
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$ |
30,704 |
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Accrued warranty |
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8,192 |
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6,381 |
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Accrued compensation and related taxes |
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4,760 |
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7,712 |
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Accrued vacation |
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1,689 |
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1,483 |
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Accrued customer rebates |
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2,386 |
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3,471 |
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Deposits from customers |
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7,139 |
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7,465 |
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Taxes on income |
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2,106 |
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1,566 |
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Other current liabilities and accrued expenses |
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3,796 |
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2,591 |
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Current portion of long-term debt |
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521 |
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521 |
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Total current liabilities |
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67,913 |
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61,894 |
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Long-term debt, less current portion |
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21,126 |
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25,218 |
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Other non-current liabilities |
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972 |
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- |
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Deferred income tax liabilities |
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89 |
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355 |
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Shareholders' equity: |
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Common stock |
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215 |
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211 |
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Additional paid in capital |
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58,177 |
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54,339 |
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Retained earnings |
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55,506 |
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48,631 |
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Accumulated other comprehensive loss |
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- |
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Total shareholders' equity |
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113,898 |
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103,181 |
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Total liabilities and shareholders' equity |
$ |
202,998 |
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$ |
190,648 |
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Spartan Motors / Page 5 of 6
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Spartan Motors, Inc. and Subsidiaries |
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March 31, 2007 |
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March 31, 2006 |
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$-000- |
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% |
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$-000- |
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% |
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Sales |
142,882 |
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103,666 |
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Cost of Products Sold |
118,190 |
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86,898 |
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Gross Profit |
24,692 |
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17.3 |
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16,768 |
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16.2 |
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Operating Expenses: |
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Research and Development |
3,790 |
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2.7 |
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2,845 |
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2.8 |
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Selling, General and Administrative |
9,482 |
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6.6 |
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7,056 |
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6.8 |
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Total Operating Expenses |
13,272 |
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9.3 |
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9,901 |
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9.6 |
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Operating Income |
11,420 |
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8.0 |
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6,867 |
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6.6 |
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Other Income (Expense): |
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Interest Expense |
(246 |
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(0.2 |
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(56 |
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(0.1 |
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Interest and Other Income |
137 |
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0.1 |
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304 |
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0.3 |
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Total Other Income (Expense) |
(109 |
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(0.1 |
) |
248 |
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0.2 |
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Earnings before Taxes on Income |
11,311 |
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7.9 |
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7,115 |
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6.8 |
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Taxes on Income |
4,104 |
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2.9 |
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2,634 |
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2.5 |
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Net Earnings |
7,207 |
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5.0 |
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4,481 |
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4.3 |
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Basic Net Earnings per Share |
0.34 |
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0.24 |
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Diluted Net Earnings per Share |
0.33 |
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0.23 |
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Basic Weighted Average Common Shares Outstanding |
21,103 |
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18,924 |
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Diluted Weighted Average Common Shares Outstanding |
21,740 |
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19,178 |
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Spartan Motors / Page 6 of 6
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Spartan Motors, Inc. and Subsidiaries |
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Three Months Ended March 31, 2007 (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 |
56,154 |
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56,154 |
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Fire Truck Chassis Sales |
30,624 |
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(6,531 |
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24,093 |
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EVTeam Product Sales |
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21,400 |
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21,400 |
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Other Product Sales |
41,235 |
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41,235 |
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Total Net Sales |
128,013 |
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|
21,400 |
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(6,531 |
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142,882 |
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Interest Expense (Income) |
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308 |
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(62 |
) |
|
246 |
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Depreciation Expense |
385 |
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|
309 |
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|
130 |
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|
824 |
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Segment Net Earnings (Loss) |
8,360 |
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(722 |
) |
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(431 |
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7,207 |
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Three Months Ended March 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 |
54,570 |
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54,570 |
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Fire Truck Chassis Sales |
22,277 |
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(4,608 |
) |
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17,669 |
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EVTeam Product Sales |
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19,698 |
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19,698 |
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Other Product Sales |
11,729 |
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11,729 |
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Total Net Sales |
88,576 |
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|
19,698 |
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(4,608 |
) |
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103,666 |
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Interest Expense (Income) |
1 |
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|
158 |
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|
(103 |
) |
|
56 |
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Depreciation Expense |
229 |
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|
305 |
|
|
109 |
|
|
643 |
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Segment Net Earnings (Loss) |
5,572 |
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(832 |
) |
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(259 |
) |
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4,481 |
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Period End Backlog (amounts in thousands) |
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March 31, 2006 |
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June 30, 2006 |
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September 30, 2006 |
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December 31, 2006 |
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March 31, 2007 |
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Motorhome Chassis * |
38,640 |
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29,141 |
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27,416 |
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28,198 |
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37,679 |
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Fire Truck Chassis * |
69,008 |
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112,874 |
|
81,889 |
|
84,445 |
|
84,416 |
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Other Product * |
7,329 |
|
31,636 |
|
56,175 |
|
49,729 |
|
53,178 |
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Total Chassis |
114,977 |
|
173,651 |
|
165,480 |
|
162,372 |
|
175,273 |
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EVTeam Product * |
66,741 |
|
68,176 |
|
65,387 |
|
69,715 |
|
74,843 |
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|
|
|
|
|
|
|
|
|
|
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Total Backlog |
181,718 |
|
241,827 |
|
230,867 |
|
232,087 |
|
250,116 |
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* Anticipated time to |
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