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 19, 2009
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 19, 2009, Spartan Motors, Inc. issued a press release concerning its financial results for the quarter and year ended December 31, 2008. 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 19, 2009. 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 19, 2009 |
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 19, 2009. |
EXHIBIT 99.1
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SPARTAN MOTORS, INC. |
1000 REYNOLDS RD. CHARLOTTE, MI 48813 USA
TELEPHONE 517.543.6400 FACSIMILE 517.543.5403
Web Page - WWW.SPARTANMOTORS.COM
FOR IMMEDIATE RELEASE
Spartan Motors Reports Record Sales & Earnings for 2008
CHARLOTTE, Michigan, Feb. 19, 2009 - Spartan Motors, Inc. (NASDAQ: SPAR) reported its best year in company history in 2008, marked by a 23.8 percent year-over-year increase in revenues and a 74.3 percent increase in net earnings.
For the fourth quarter ended Dec. 31, 2008, Spartan reported:
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Net earnings of $0.09 per diluted share ($0.26 excluding one-time charges) |
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Net sales of $146.3 million |
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Gross margin of 21.1% |
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Return on invested capital of 7.2% |
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Consolidated backlog of $169.9 million |
Fourth Quarter & Year-End Results
Spartan reported fourth quarter net earnings of $2.9 million, or $0.09 per diluted share, on net sales of $146.3 million, compared with net earnings of $8.2 million, or $0.25 per diluted share, on net sales of $237.6 million in the same quarter of 2007.
Spartan reported consolidated gross margin of 21.1 percent in the fourth quarter of 2008, a 66.1 percent increase over the same period in 2007 and a 16.6 percent increase over its gross margin in the third quarter of 2008. Spartan attributed the year-over-year increase in gross margin to higher sales in its service, parts and accessories business, productivity improvements and a change in product mix.
The company reported a 51.3 percent increase in selling, general and administrative (SG&A) costs in the fourth quarter of 2008 compared with the prior year period, driven primarily by legal expenses and fines related to a previously reported settlement between Spartan Chassis and the Department of Justice. This included an expense of $6.0 million, or a net effect of approximately $0.17 per share, to encompass all fines and penalties.
For the year ended 2008, Spartan's sales increased 23.8 percent year-over year to $844.4 million and net earnings grew 74.3 percent year-over-year to $42.7 million, or $1.32 per diluted share, the highest profits in company history. Spartan Motors reported consolidated backlog of approximately $169.9 million as of Dec. 31, 2008 and the company anticipates fulfilling its current backlog orders by October 2009.
"Despite the economic recession and other challenges, we maintained our focus and created the best performance in the history of the company," said John Sztykiel, president and CEO of Spartan Motors. "During the year, we also scaled our operations to match demand, controlled costs, invested resources into innovation and product development and ended the year on financially solid ground. Our diversification across several sectors gives us numerous opportunities while minimizing risk. Additionally, our business model gives us the agility to quickly respond to market needs, take advantage of strategic opportunities when they arise and correctly size our operations to ensure growth.
-more-
Spartan Motors / Page 2 of 8
"Though our 2009 results are not expected to match our performance in 2008, we are focused on maximizing our opportunities in 2009 and executing our long-term strategic plan to fuel our growth in 2010 and beyond. As part of this plan, we expect to introduce new products into specialty vehicle markets where we do not currently compete. Since our inception in 1975, a large recession year, periods of recession have been followed by years of growth for Spartan. Recessions cause society and business to restructure, which in turn cause vehicles to change. While over the short term we are taking the steps to manage through the recession, we have demonstrated profitable growth over the long term."
Spartan Chassis
Sales at Spartan Chassis, the company's largest subsidiary and operating unit, decreased 38.9 percent year-over year to $129.0 million for the current quarter. Spartan Chassis represented 88.2 percent of Spartan Motors' total consolidated sales in the 2008 fourth quarter. Spartan Chassis' net earnings declined 65.2 percent year-over-year in the quarter, reflecting the expenses for penalties and fines.
Spartan's chassis sales to the Class A diesel motorhome market decreased 86.6 percent year-over-year in the quarter, while backlog for RV chassis decreased 79.7 percent year-over-year to $5.6 million as of Dec. 31, 2008. Sales of fire truck chassis in the quarter increased 12.9 percent compared to the same period in 2007, and backlog for fire truck chassis at the end of the 2008 fourth quarter was $73.5 million, a 21.7 percent year-over-year increase.
Other Products sales, including specialty chassis for mine-resistant and MRAP military vehicles, and Spartan Chassis' growing service, parts and accessories (SPA) business, decreased 31.3 percent year-over-year in the fourth quarter of 2008, reflecting the completion of several large orders for military customers. Other Products backlog, which excludes service parts, was $8.5 million as of Dec. 31, 2008, compared to Other Products backlog of $199.4 million at year-end 2007.
"Sales from SPA continued to grow at a rapid pace during the fourth quarter," said Sztykiel. "The majority of this growth in SPA was for mine-resistant military and MRAP vehicles. However, we are also targeting greater expansion of SPA into the motorhome and emergency-rescue markets, both of which are significantly larger than the SPA business for specialty vehicle market."
Emergency Vehicle Team (EVTeam)
Spartan's EVTeam operating unit, consisting of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries, reported a 13.0 percent year-over-year decline in sales for the 2008 fourth quarter. The EVTeam posted a net loss of $393,000 for the quarter. The loss was a 77.9 percent improvement compared to the fourth quarter of 2007, a result of improved operating efficiencies. The EVTeam's sales represented 11.8 percent of total company-wide sales in the 2008 fourth quarter, net of eliminations. For the year ended 2008, the EVTeam reported a 3.6 percent improvement in sales compared to 2007, and 57.0 percent year-over-year improvement in segment bottom-line. Backlog for the emergency vehicle team was $82.4 million at the end 2008, a 60.6 percent year-over-year increase compared to $51.3 million at the end of 2007.
Financial Position
Spartan reported positive operating cash flow of $59.0 million in the current quarter and the company ended the quarter with $13.7 million in cash and cash equivalents, as well as $16.6 million in long-term debt. As previously reported, Spartan Motors holds a $50 million line of credit with J.P. Morgan Chase Bank, which remains fully available to fund future needs.
"We are generating cash and have minimal long-term debt, giving us access to the capital we need to grow the business," said Chief Financial Officer Jim Knapp. "Our financial strength allows us to make the best decisions to maximize shareholder return, whether it is investing in the business, repurchasing stock or evaluating strategic acquisitions."
Spartan Motors / Page 3 of 8
On a consolidated basis, Spartan posted a return on invested capital (ROIC) of 7.2 percent in the fourth quarter of 2008, compared to ROIC of 27.4 percent for the same quarter in 2007. For the full year 2008, Spartan reported ROIC of 25.8 percent compared to 19.8 percent in 2007. Spartan defines return on invested capital as operating income less taxes, on an annualized basis, divided by total shareholders' equity.
Market Outlook
Spartan reported it expects its consolidated 2009 results to be less than 2008 because of market and economic conditions, and a reduction in specialty vehicle sales, primarily large-scale military contracts, though the potential for larger orders remains.
"Though we expect a year-over-year decline for specialty vehicle sales in the first half of 2009, we are currently working closely with our military customers to develop new lines of mine-resistant vehicles, such as the M-ATV program for deployment in Afghanistan and other variants for the U.S. and other militaries," said Sztykiel. "We do emphasize that we are in the specialty vehicle business today and expect to be in the future. Our opportunities exist because of our speed-to-market, manufacturing flexibility, on-time delivery, product performance and superior service, parts and support, all of which continue to be our strengths in 2009. We continue to produce smaller orders of specialized mine-resistant variants for the U.S. military and other nations, which we see as a bridge to larger opportunities in the future.
"In addition, emergency-rescue remains Spartan's largest, most stable market, and we expect continuous growth based on increased market share and new product and innovation initiatives. For all our emergency-rescue products, we expect to see growth in 2009. We have already built a strong order pipeline for our fire truck chassis and fire trucks in the first half of the year, due in part to increased demand from changes to industry safety regulations."
Sztykiel concluded: "Our focus in motorhomes this year is to position ourselves for the eventual industry recovery. We expect flat to lower sales in 2009 for motorhome chassis because of industry conditions. However, retail sales have severely depleted dealer inventory, giving us the potential for a significant rebound when the RV industry begins its eventual recovery. Though difficult to predict, we believe there will be a probable year-over-year decline in the second half for motorhome chassis sales. In the meantime, we are continuing new product development and engineering new innovations for motorhome chassis to gain market share and new OEM customers."
Conference Call & Webcast
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 www.spartanmotors.com, click on "Shareholders," and then on "Webcasts."
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 1,200 at facilities in Michigan, Pennsylvania, South Carolina and South Dakota. Spartan reported sales of $844.4 million in 2008 and is focused on becoming the premier manufacturer of specialty vehicles and chassis in North America.
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Spartan Motors / Page 4 of 8
This release contains forward-looking statements, including, without limitation, statements concerning our business, future plans and objectives and the performance of our products. Forward looking statements are identifiable by words such as "believe," "anticipate," "will," "sustain," and "continue." 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). Govern ment contracts and subcontracts typically involve long payment and purchase cycles, competitive bidding, qualification requirements, delays or changes in funding, extensive specification 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 5 of 8
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December 31, |
December 31, |
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$-000- |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
13,741 |
$ |
13,527 |
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Accounts receivable, net |
75,935 |
132,907 |
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Inventories |
86,648 |
103,076 |
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Deferred income tax assets |
7,076 |
6,925 |
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Other current assets |
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8,063 |
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1,978 |
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Total current assets |
191,463 |
258,413 |
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Property, plant and equipment, net |
66,786 |
56,673 |
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Goodwill |
2,457 |
2,457 |
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Deferred income tax assets |
241 |
775 |
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Other assets |
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193 |
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346 |
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Total assets |
$ |
261,140 |
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$ |
318,664 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
21,776 |
$ |
90,769 |
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Accrued warranty |
8,352 |
10,824 |
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Accrued compensation and related taxes |
12,136 |
10,431 |
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Accrued vacation |
1,904 |
1,758 |
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Accrued customer rebates |
1,498 |
1,963 |
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Deposits from customers |
9,922 |
5,540 |
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Taxes on income |
1,972 |
551 |
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Other current liabilities and accrued expenses |
4,584 |
3,367 |
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Current portion of long-term debt |
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10,640 |
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522 |
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Total current liabilities |
72,784 |
125,725 |
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Other non-current liabilities |
1,157 |
1,025 |
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Long-term debt, less current portion |
16,556 |
62,695 |
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Shareholders' equity: |
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Common stock |
326 |
324 |
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Additional paid in capital |
64,606 |
62,649 |
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Retained earnings |
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105,711 |
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66,246 |
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Total shareholders' equity |
170,643 |
129,219 |
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Total liabilities and shareholders' equity |
$ |
261,140 |
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$ |
318,664 |
Spartan Motors / Page 6 of 8
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December 31, 2008 |
December 31, 2007 |
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$-000- |
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% |
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$-000- |
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% |
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Sales |
146,314 |
237,567 |
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Cost of Products Sold |
115,387 |
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207,345 |
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Gross Profit |
30,927 |
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21.1 |
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30,222 |
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12.7 |
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Operating Expenses: |
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Research and Development |
4,814 |
3.3 |
4,543 |
1.9 |
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Selling, General and Administrative |
18,971 |
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13.0 |
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12,541 |
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5.3 |
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Total Operating Expenses |
23,785 |
16.3 |
17,084 |
7.2 |
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Operating Income |
7,142 |
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4.9 |
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13,138 |
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5.5 |
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Other Income (Expense): |
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Interest Expense |
(251 |
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(0.2 |
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(830 |
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(0.3 |
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Interest and Other Income |
56 |
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(0.0 |
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205 |
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0.1 |
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Total Other Income (Expense) |
(195 |
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(0.1 |
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(625 |
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(0.2 |
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Earnings before Taxes on Income |
6,947 |
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4.7 |
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12,513 |
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5.3 |
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Taxes on Income |
4,085 |
2.8 |
4,301 |
1.8 |
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Net Earnings |
2,862 |
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1.9 |
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8,212 |
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3.5 |
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Basic Net Earnings per Share |
0.09 |
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0.26 |
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Diluted Net Earnings per Share |
0.09 |
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0.25 |
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Basic Weighted Average Common Shares Outstanding |
32,086 |
32,070 |
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Diluted Weighted Average Common Shares Outstanding |
32,244 |
32,780 |
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Spartan Motors / Page 7 of 8
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December 31, 2008 |
December 31, 2007 |
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$-000- |
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% |
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$-000- |
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% |
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Sales |
844,390 |
681,922 |
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Cost of Products Sold |
696,120 |
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585,421 |
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Gross Profit |
148,270 |
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17.5 |
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96,501 |
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14.2 |
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Operating Expenses: |
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Research and Development |
19,461 |
2.3 |
15,868 |
2.3 |
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Selling, General and Administrative |
60,097 |
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7.1 |
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41,383 |
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6.1 |
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Total Operating Expenses |
79,558 |
9.4 |
57,251 |
8.4 |
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Operating Income |
68,712 |
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8.1 |
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39,250 |
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5.8 |
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Other Income (Expense): |
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Interest Expense |
(2,062 |
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(0.2 |
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(1,748 |
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(0.3 |
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Interest and Other Income |
679 |
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0.1 |
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725 |
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0.1 |
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Total Other Income (Expense) |
(1,383 |
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(0.2 |
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(1,023 |
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(0.2 |
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Earnings before Taxes on Income |
67,329 |
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8.0 |
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38,227 |
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5.6 |
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Taxes on Income |
24,615 |
2.9 |
13,723 |
2.0 |
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Net Earnings |
42,714 |
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5.1 |
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24,504 |
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3.6 |
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Basic Net Earnings per Share |
1.33 |
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|
0.77 |
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Diluted Net Earnings per Share |
1.32 |
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0.75 |
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Basic Weighted Average Common Shares Outstanding |
32,008 |
31,935 |
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Diluted Weighted Average Common Shares Outstanding |
32,437 |
32,833 |
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Spartan Motors / Page 8 of 8
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Three Months Ended December 31, 2008 (amounts in thousands of dollars) |
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Business Segments |
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Chassis |
EVTeam |
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Other |
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Consolidated |
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Motorhome Chassis Sales |
6,990 |
6,990 |
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Fire Truck Chassis Sales |
32,613 |
(6,730 |
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25,883 |
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EVTeam Product Sales |
23,999 |
23,999 |
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Other Product Sales |
89,442 |
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89,442 |
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Total Net Sales |
129,045 |
23,999 |
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(6,730 |
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146,314 |
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Interest Expense |
11 |
460 |
(220 |
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251 |
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Depreciation Expense |
888 |
277 |
600 |
1,765 |
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Segment Net Earnings (Loss) |
4,518 |
(393 |
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(1,263 |
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2,862 |
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Twelve Months Ended December 31, 2008 (amounts in thousands of dollars) |
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Business Segments |
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Chassis |
EVTeam |
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Other |
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Consolidated |
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Motorhome Chassis Sales |
91,141 |
91,141 |
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Fire Truck Chassis Sales |
121,641 |
(27,619 |
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94,022 |
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EVTeam Product Sales |
92,658 |
92,658 |
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Other Product Sales |
566,569 |
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566,569 |
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Total Net Sales |
779,351 |
92,658 |
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(27,619 |
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844,390 |
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Interest Expense |
27 |
1,620 |
415 |
2,062 |
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Depreciation Expense |
2,885 |
1,147 |
2,027 |
6,059 |
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Segment Net Earnings (Loss) |
51,365 |
(2,179 |
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(6,472 |
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42,714 |
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Period End Backlog (amounts in thousands of dollars) |
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Dec. 31, 2007 |
March 31, 2008 |
June 30, 2008 |
Sept. 30, 2008 |
Dec. 31, 2008 |
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Motorhome Chassis * |
27,312 |
17,465 |
12,533 |
9,069 |
5,552 |
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Fire Truck Chassis * |
60,374 |
70,720 |
75,931 |
70,815 |
73,473 |
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Other Product * |
199,362 |
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166,457 |
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188,665 |
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46,038 |
|
8,500 |
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Total Chassis |
287,048 |
254,642 |
277,129 |
125,922 |
87,525 |
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EVTeam Product * |
51,316 |
|
49,975 |
|
43,094 |
|
57,850 |
|
82,374 |
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Total Backlog |
338,364 |
|
304,617 |
|
320,223 |
|
183,772 |
|
169,899 |
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* Anticipated time to fill backlog orders; 2 months or less for motorhome chassis and 10 months or less for fire truck chassis, other product and EVTeam product