Spartan’s Q2 Net Income Rises 272%

Aug. 4, 2016
Spartan Motors, Inc. (NASDAQ: SPAR) reported net income of $4.4 million in the second quarter compared to a $1.2 million in the same period of 2015—an increase of 272%.

Spartan Motors, Inc. (NASDAQ: SPAR) reported net income of $4.4 million in the second quarter compared to a $1.2 million in the same period of 2015—an increase of 272%.

"We are pleased with the operating results achieved for the quarter as we continue to show improvement and incremental, sequential quarterly progress in all three business segments," said Daryl Adams, President and Chief Executive Officer of Spartan Motors.  "Our process improvement and lean initiatives introduced as part of our multi-year turnaround plan, together with a focused execution of our business plan, are generating operational efficiencies and driving increased profitability.  Our employees have embraced this transformation, and, as a result of their contributions, we are pleased to report Spartan's strongest profitable quarter since the second quarter of 2009."

Fleet Vehicles and Services (FVS) Second Quarter Results (formerly Delivery & Service Vehicles)

FVS segment revenue grew to $73.8 million from $52.8 million, an increase of 39.8%.  Revenue growth was primarily due to increased vehicle sales and higher volume at vehicle up-fit centers.

Operating income for the segment increased $3.2 million to $6.5 million, or to 8.8% of sales, from $3.3 million, or 6.2% of sales, a year ago.  Growth in operating income was primarily due to favorable revenue mix and the continued positive impact of process improvement and lean initiatives introduced during the first quarter.  

Segment backlog at June 30, 2016 totaled $139.7 million compared to $137.7 million at March 31, 2016.

Specialty Chassis & Vehicles (SCV) Second Quarter Results

SCV segment revenue grew to $36.3 million from $29.2 million, an increase of 24.3%. Sales of motorhome chassis rose 24.2% to $24.5 million from $19.7 million, due primarily to higher unit shipments year-over-year and to a lesser extent, from price changes enacted during the current quarter.  Increased levels of contract manufacturing combined with sales from the completion of our defense vehicle build accounted for the majority of the revenue growth.  Operating income increased to $3.1 million from $1.7 million last year, an 83% increase.  

Segment backlog at June 30, 2016 totaled $12.2 million compared to $20.8 million at March 31, 2016.

Emergency Response (ER) Second Quarter Results

ER segment revenue decreased $10.4 million, or 16.6%, to $52.4 million from $62.8 million.  Lower revenue resulted from fewer shipments of complete fire apparatus and custom cab and chassis compared to the second quarter of 2015, which included an international multi-unit order.

The ER segment reported an operating loss of $2.4 million in the second quarter, an increase of $1.5 million from an operating loss of $0.9 million in the second quarter of 2015.  ER adjusted operating loss for the quarter improved $0.4 million to $0.5 million from an adjusted operating loss of $0.9 million last year. 

Segment backlog at June 30, 2016 totaled $152.2 million compared to $160.4 million at March 31, 2016.

Second Half 2016 Outlook

"Our balance sheet remains strong, with cash on hand improving by $19.2 million year-over-year to $39.8 million," said Rick Sohm, Chief Financial Officer of Spartan Motors. "Our strong operating results continue to generate cash in excess of our working capital requirements, which enabled us to repurchase in open market transactions approximately 422,000 shares for $2 million during the quarter.  Looking forward to the second-half of 2016, we anticipate modest year-over-year sales growth and continued operational improvements allowing us to raise the mid-point of our EPS guidance by 12.5%."