UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 1, 2017

SPARTAN MOTORS, INC.
(Exact Name of Registrant as Specified in Its Charter)

Michigan
(State or Other Jurisdiction
of Incorporation)	0-13611
(Commission File No.)	38-2078923
(IRS Employer
Identification No.)	

1541 Reynolds Road, Charlotte, Michigan
(Address of Principal Executive Offices)	48813
(Zip Code)	

517-543-6400
(Registrant's Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if changed Since Last Report)

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:
 
☐	Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
 
Explanatory Note
 
On January 5, 2017, Spartan Motors, Inc. filed a Current Report on Form 8-K to report that its wholly owned subsidiary, Spartan Motors USA, Inc., had completed its acquisition of essentially all of the assets and certain liabilities of Smeal Fire Apparatus Co., Smeal Properties, Inc., Ladder Tower Co., and U.S. Tanker Co. (collectively, “Smeal”) pursuant to an Asset Purchase Agreement dated December 12, 2016 (the “Purchase Agreement”). This amendment is being filed to amend and supplement Item 9.01 of the Form 8-K filed on January 5, 2017 to include the financial statements and pro forma financial information required by parts (a) and (b) of Item 9.01 of form 8-K.

Item 9.01	Financial Statements and Exhibits	
 
 	(a)	Financial Statements of Business Acquired	
 
Audited financial statements for Smeal Fire Apparatus Co. and Subsidiaries for the years ended December 31, 2016 and 2015, the six months ended December 31, 2014 and the year ended June 30, 2014.
 
 	(b)	Pro Forma Financial Information	
 
Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2016 and Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2016.
 
 	(d)	Exhibits	
 
Exhibit No.	Description	
 	 	
23.1	Consent of independent auditor.	
 	 	
99.1	Audited financial statements for Smeal Fire Apparatus Co. and Subsidiaries for the years ended December 31, 2016 and 2015.	
 	 	
99.2	Audited financial statements for Smeal Fire Apparatus Co. and Subsidiaries for the six months ended December 31, 2014 and the year ended June 30, 2014.	
 	 	
99.3	Unaudited pro forma condensed combined balance sheet as of December 31, 2016, and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016.	
 
2

 
 
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.

 	 	SPARTAN MOTORS, INC.	 	

Dated: March 16, 2017	 	/s/ Frederick J. Sohm	 	
 	 	By: Frederick J. Sohm	 	
 	 	Its:  Chief Financial Officer	 	

 

3

Exhibit 23.1
 
Consent of Independent Auditor
 
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-98083, 333-145674, 333-177088, 333-183871 and 333-213581) of Spartan Motors, Inc. of our report dated March 1, 2017, relating to our audit of the consolidated financial statements of Smeal Fire Apparatus Co. and Subsidiaries as of and for the years ended December 31, 2016 and 2015, and our report dated March 25, 2015 relating to our audit of the consolidated financial statements of Smeal Fire Apparatus Co. and Subsidiaries as of and for the six months ended December 31, 2014 and the year ended June 30, 2014 included in this Current Report on Form 8-K/A.
 
/s/ Lutz & Company, P.C.
Omaha, Nebraska
March 16, 2017

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.3
 
On January 1, 2017, Spartan Motors USA, Inc., a wholly-owned subsidiary of Spartan Motors, Inc. (the “Company” or “Spartan”), completed its acquisition of essentially all of the assets and certain liabilities of Smeal Fire Apparatus Co., Smeal Properties, Inc., Ladder Tower Co., and U.S. Tanker Co. (collectively, “Smeal”) pursuant to an Asset Purchase Agreement dated December 12, 2016 (the “Purchase Agreement”). The assets acquired consist of the assets used by Smeal in the operation of its business designing, manufacturing, and distributing vehicles, components, and apparatus for the fire service industry.
 
The following Unaudited Pro Forma Condensed Combined Financial Information was prepared using the purchase method of accounting, with Spartan Motors, Inc. being the acquiring entity, and reflects estimates and assumptions deemed appropriate by Company management to give effect to the acquisition as if it had been completed effective December 31, 2016, with respect to the Unaudited Pro Forma Condensed Combined Balance Sheet, and as of January 1, 2016, with respect to the Unaudited Pro Forma Condensed Combined Statements of Operations.
 
The historical financial statements have been adjusted to give effect to pro forma events that are directly attributable to the acquisition and the long-term debt incurred by the Company at the time of the acquisition. The adjustments are factually supportable and, with respect to the Unaudited Pro Forma Condensed Combined Statements of Operations, are expected to have a continuing impact on the results of the Company after the acquisition. The purchase price allocation reflected in the following Unaudited Pro Forma Combined Condensed Financial Statements is preliminary in nature as the final, actual purchase price and certain valuations have not been finalized. The final purchase price and the final purchase price allocation may differ materially from the preliminary amounts utilized in the following Unaudited Pro Forma Condensed Combined Financial Statements, although these amounts represent management’s current best estimate of fair value. The pro forma adjustments are described in the accompanying Notes to the Unaudited Pro Forma Combined Condensed Financial Statements.
 
The Unaudited Pro Forma Condensed Combined Financial Information should be read in conjunction with the accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Statements, the separate historical financial statements of Spartan Motors, Inc. included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on March 3, 2017, and the separate historical financial statements of Smeal Fire Apparatus Co. and Subsidiaries included within this report as Exhibit 99.1 for the years ended December 31, 2016 and 2015 and 99.2 for the six months ended December 31, 2014 and the year ended June 30, 2014.
 
The Pro Forma Condensed Combined Financial Statements are unaudited, presented for illustrative purposes only and are not necessarily indicative of the financial condition or results of operations that actually would have been realized had the acquisition been completed on the dates indicated above. Additionally, the Unaudited Pro Forma Condensed Combined Financial Statements do not purport to project the future financial condition or results of operations of the combined company, and do not include the effects of potential operating synergies or cost savings related to the acquisition. Additionally, management has not completed a full evaluation of Smeal’s accounting and business practices, and any changes identified may impact the future combined operating results.

 
 
Unaudited Pro Forma Condensed Combined Balance Sheet
(amounts in thousands, except per share data)
 
 	 	Historical	 	 	Pro Forma	 	
 	 	Spartan	 	 	Smeal	 	 	 	 	 	 	Combined	 	
 	 	December 31,	 	 	December 31,	 	 	 	 	 	 	December 31,	 	
 	 	2016	 	 	2016	 	 	Adjustments	 	 	2016	 	
ASSETS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	32,041	 	 	$	3,825	 	 	$	-	 	 	$	35,866	 	
Accounts receivable, net	 	 	65,441	 	 	 	822	 	 	 	5,835	 	A	 	64,602	 	
 	 	 	 	 	 	 	 	 	 	 	(99	)	B	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(7,397	)	C	 	 	 	
Inventories	 	 	58,896	 	 	 	45,535	 	 	 	(5,498	)	A	 	103,824	 	
 	 	 	 	 	 	 	 	 	 	 	9,527	 	D	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(4,636	)	E	 	 	 	
Income taxes receivable	 	 	1,287	 	 	 	-	 	 	 	-	 	 	 	1,287	 	
Other current assets	 	 	4,526	 	 	 	1,141	 	 	 	(78	)	A	 	5,429	 	
 	 	 	 	 	 	 	 	 	 	 	(160	)	F	 	 	 	
Total current assets	 	 	162,191	 	 	 	51,323	 	 	 	(2,506	)	 	 	211,008	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	53,116	 	 	 	6,805	 	 	 	(762	)	G	 	59,159	 	
Goodwill	 	 	15,961	 	 	 	1,097	 	 	 	(1,097	)	H	 	25,183	 	
 	 	 	 	 	 	 	 	 	 	 	9,222	 	H	 	 	 	
Intangible assets, net	 	 	6,385	 	 	 	 	 	 	 	3,900	 	I	 	10,285	 	
Other assets	 	 	2,331	 	 	 	80	 	 	 	-	 	 	 	2,411	 	
Net deferred tax asset	 	 	3,310	 	 	 	-	 	 	 	 	 	 	 	3,310	 	
TOTAL ASSETS	 	$	243,294	 	 	$	59,305	 	 	$	8,757	 	 	$	311,356	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	31,336	 	 	$	11,006	 	 	$	226	 	A	$	35,171	 	
 	 	 	 	 	 	 	 	 	 	 	(7,397	)	C	 	 	 	
Accrued warranty	 	 	19,334	 	 	 	500	 	 	 	1,400	 	J	 	21,234	 	
Accrued compensation and related taxes	 	 	13,188	 	 	 	1,458	 	 	 	-	 	 	 	14,646	 	
Deposits from customers	 	 	16,142	 	 	 	27,982	 	 	 	(2,260	)	A	 	41,864	 	
Other current liabilities and accrued expenses	 	 	7,659	 	 	 	1,400	 	 	 	(1,043	)	K	 	7,971	 	
 	 	 	 	 	 	 	 	 	 	 	(45	)	A	 	 	 	
Current portion of long-term debt	 	 	65	 	 	 	2,600	 	 	 	(2,600	)	L	 	65	 	
Total current liabilities	 	 	87,724	 	 	 	44,946	 	 	 	(11,719	)	 	 	120,951	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	2,544	 	 	 	125	 	 	 	2,370	 	M	 	4,879	 	
 	 	 	 	 	 	 	 	 	 	 	(160	)	F	 	 	 	
Long-term debt, less current portion	 	 	74	 	 	 	-	 	 	 	32,500	 	N	 	32,574	 	
Total liabilities	 	 	90,342	 	 	 	45,071	 	 	 	22,991	 	 	 	158,404	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock, no par value: 2,000 shares authorized (none issued)	 	 	-	 	 	 	-	 	 	 	 	 	 	 	-	 	
Common stock, $0.01 par value; 40,000 shares authorized; 34,383 and 34,271 outstanding	 	 	344	 	 	 	4	 	 	 	(4	)	O	 	344	 	
Additional paid in capital	 	 	76,837	 	 	 	269	 	 	 	(269	)	O	 	76,837	 	
Retained earnings	 	 	76,428	 	 	 	13,961	 	 	 	(13,961	)	O	 	76,428	 	
Total Spartan Motors, Inc. shareholders’ equity	 	 	153,609	 	 	 	14,234	 	 	 	(14,234	)	 	 	153,609	 	
Non-controlling interest	 	 	(657	)	 	 	 	 	 	 	 	 	 	 	(657	)	
Total shareholders' equity	 	 	152,952	 	 	 	14,234	 	 	 	(14,234	)	 	 	152,952	 	
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	 	$	243,294	 	 	$	59,305	 	 	$	8,757	 	 	$	311,356	 	
 
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements

 
 
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2016
(amounts in thousands, except per share data)
 
 	 	Historical	 	 	Pro Forma	 	
 	 	Spartan
Motors, Inc.	 	 	Smeal Fire
Apparatus Co., Inc.	 	 	Adjustments	 	 	Combined	 	
Revenue	 	$	590,777	 	 	$	94,636	 	 	$	(30,748	)	P	$	656,292	 	
 	 	 	 	 	 	 	 	 	 	 	1,627	 	Q	 	 	 	
Cost of products sold	 	 	518,113	 	 	 	90,951	 	 	 	(30,748	)	P	 	579,589	 	
 	 	 	 	 	 	 	 	 	 	 	1,606	 	Q	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(453	)	R	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	644	 	S	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(524	)	T	 	 	 	
Restructuring charges	 	 	136	 	 	 	-	 	 	 	-	 	 	 	136	 	
Gross profit	 	 	72,528	 	 	 	3,685	 	 	 	354	 	 	 	76,567	 	
Selling, general and administrative	 	 	62,944	 	 	 	8,386	 	 	 	(132	)	U	 	69,958	 	
 	 	 	 	 	 	 	 	 	 	 	(742	)	R	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	384	 	S	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(882	)	V	 	 	 	
Restructuring charges	 	 	959	 	 	 	-	 	 	 	-	 	 	 	959	 	
Total operating expenses	 	 	63,903	 	 	 	8,386	 	 	 	(1,372	)	 	 	70,917	 	
Operating income (loss)	 	 	8,625	 	 	 	(4,701	)	 	 	1,726	 	 	 	5,650	 	
Interest expense and other	 	 	78	 	 	 	(159	)	 	 	288	 	W	 	(491	)	
 	 	 	 	 	 	 	 	 	 	 	(698	)	X	 	 	 	
Income (loss) before income taxes	 	 	8,703	 	 	 	(4,860	)	 	 	1,316	 	 	 	5,159	 	
Taxes	 	 	100	 	 	 	-	 	 	 	102	 	Y	 	202	 	
Net earnings (loss)	 	 	8,603	 	 	 	(4,860	)	 	 	1,214	 	 	 	4,957	 	
Less: net earnings (loss) attributable to non-controlling interest	 	 	(7	)	 	 	-	 	 	 	-	 	 	 	(7	)	
Net earnings (loss) attributable to Spartan Motors, Inc.	 	$	8,610	 	 	$	(4,860	)	 	$	1,214	 	 	$	4,964	 	
Basic and diluted net earnings (loss) per share	 	$	0.25	 	 	 	 	 	 	 	 	 	 	$	0.14	 	
Basic and diluted weighted average common shares outstanding	 	 	34,405	 	 	 	 	 	 	 	 	 	 	 	34,405	 	
 
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements

 
 
Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
(dollar amounts in thousands)
 
Note 1 Description of the Transaction and Basis of Presentation
On January 1, 2017, Spartan Motors USA, Inc., a wholly-owned subsidiary of Spartan Motors, Inc. (the “Company”), completed its acquisition of essentially all of the assets and certain liabilities of Smeal Fire Apparatus Co., Smeal Properties, Inc., Ladder Tower Co., and U.S. Tanker Co. (collectively, “Smeal”) pursuant to an Asset Purchase Agreement dated December 12, 2016 (the “Purchase Agreement”). The assets acquired consist of the assets used by Smeal in the operation of its business designing, manufacturing, and distributing vehicles, components, and apparatus for the fire service industry.
 
The consideration paid by the Company at closing consisted of $32,497 paid in cash and the forgiveness of certain liabilities owed by Smeal to the Company in the amount of $7,397. Pursuant to the Purchase Agreement, the consideration is subject to a final working capital adjustment. In addition, pursuant to the Purchase Agreement, the Company will be required to make a subsequent tax gross-up payment, which is not expected to exceed $2,400.
 
Smeal has been a significant chassis customer of the Company. The price paid pursuant to the Purchase Agreement was the subject of arm's length negotiation between Smeal and the Company.
 
The cash consideration was funded primarily through borrowings from the Company’s existing $100,000 line of credit, as set forth in the Second Amended and Restated Credit Agreement, dated as of October 31, 2016, by and among the Company and its affiliates, as borrowers; certain lenders; Wells Fargo Bank, National Association, as Administrative Agent; and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner.
 
The aggregate cost of the acquisition was approximately $42,264, inclusive of the fair value of potential estimated additional contingent consideration related to a tax gross-up payment. We have allocated the aggregate purchase price to Smeal’s net tangible and identifiable intangible assets based on their estimated fair values. The excess of the aggregate cost over the net estimated fair value of the tangible and identifiable intangible assets and liabilities assumed will be recorded as goodwill. The purchase price allocation reflected in the Unaudited Pro Forma Combined Condensed Financial Statements is preliminary in nature as the final, actual purchase price and certain valuations have not been finalized. The final purchase price and the final purchase price allocation may differ materially from the preliminary amounts utilized in the following Unaudited Pro Forma Condensed Combined Financial Statements, although these amounts represent management’s current best estimate of fair value. Below is a summary of the allocation of the aggregate cost of the acquisition:
 
Cash	$	3,825	
Accounts receivable	 	6,558	
Inventory	 	44,928	
Other current assets	 	903	
Property, plant and equipment	 	6,043	
Intangible assets	 	3,900	
Goodwill	 	9,222	
Other assets	 	80	
Total assets acquired	 	75,459	
 	 	 	
Accounts payable	 	3,861	
Customer prepayments	 	25,722	
Other liabilities	 	3,612	
Total liabilities assumed	 	33,195	
 	 	 	
Total fair value of net assets acquired	 	42,264	
Less cash acquired	 	(3,825)	
Total consideration, less cash acquired	$	38,439	
 
The acquired intangible assets consist of a trade name and unpatented technology, with estimated fair values of $2,400 and $1,500, respectively, at January 1, 2017. The unpatented technology will be amortized over its estimated useful life of 10 years. The trade name was determined to have an indefinite life and therefore is not amortizable.

 
 
Note 2 Pro Forma Adjustments 
 
The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Financial Statements, including certain adjustments that were made to the historical presentation of Smeal to conform to the financial statement presentation and accounting policies of Spartan, are as follows:
 
Balance Sheet
 
A	Represents adjustment of historical Smeal inventory, accounts receivable, accounts payable and deposits from customers to align with Spartan’s revenue recognition policy. Spartan considers title and risk of loss to have passed, and revenue to be recognizable, when the product has passed customer inspection and has been delivered to the customer. Smeal considered title to have passed, and revenue to be recognizable, only when the manufacturer’s statement of origin was issued to the customer, which was generally upon receipt of payment in full for the product.	
B	Represents the elimination of historical Smeal accounts receivable that were not acquired.	
C	Represents the elimination of historical Smeal payable to Spartan Motors USA, Inc.	
D	Represents the elimination of historical Smeal LIFO inventory reserve to align with Spartan’s accounting policy as Spartan does not utilize LIFO.	
E	Represents the adjustment of historical Smeal inventories to estimated fair value.	
F	Represents the elimination of historical Smeal asset and liability related to deferred compensation and other that were excluded from the acquisition.	
G	Represents adjustment of historical Smeal property, plant, and equipment to estimated fair value.	
H	Represents the elimination of historical Smeal goodwill of $1,097 and the estimated additional goodwill from the purchase price allocation of $9,222.	
I	Represents the adjustment to estimated fair value of intangible assets separately identifiable from goodwill as of the acquisition date.	
J	Represents adjustment of historical Smeal warranty liability to estimated fair value.	
K	Represents adjustment of historical Smeal Accrued compensation and related taxes for health insurance and other liabilities not assumed in the acquisition.	
L	Represents the retirement of Smeal's bank debt as part of the asset acquisition.	
M	Represents the estimated fair value of the contingent liability to the former owners of Smeal.	
N	Represents borrowings under Spartan's credit agreement to fund the Smeal acquisition.	
O	Represents the elimination of Smeal's historical shareholders' equity.	

 
 
Statement of Operations
 
P	Adjustment to eliminate Spartan chassis sales to Smeal. Sales of chassis to Smeal, which was previously a third party customer, become intercompany sales as a result of the acquisition.	
Q	Adjustment to historical Smeal revenue recognition to align with Spartan’s accounting policies. Spartan considers title and risk of loss to have passed, and revenue to be recognizable, when the product has passed customer inspection and has been delivered to the customer. Smeal considered title to have passed, and revenue to be recognizable, only when the manufacturer’s statement of origin was issued to the customer, which was generally upon receipt of payment in full for the product.	
R	Adjustment to reverse Smeal historical depreciation and amortization expense.	
S	Adjustment to add depreciation expense relating to estimated fair value of acquired assets over their remaining useful lives.	
T	Impact of adjusting LIFO inventory to FIFO to align with Spartan’s accounting policy as Spartan does not utilize LIFO.	
U	Reversal of 2016 Smeal accrual for severance as excluded from the acquisition.	
V	Reversal of acquisition expenses incurred in 2016, which are not ongoing expenses.	
W	Reversal of interest expense incurred by Smeal (net of interest income).	
X	Addition of interest expense on borrowing to fund acquisition (at rates in effect January through December 2016).	
Y	Income tax impact of Smeal acquisition when consolidated with Spartan Motors, Inc.