Spartan Motors, Inc. (NASDAQ: SPAR), parent company of Utilimaster, reported net income of $0.2 million, or $0.01 per share, in the quarter ended June 30. The net income in the first quarter was a loss of $0.06 per share in the first quarter.

In the second quarter of 2013, Spartan reported net income of $0.7 million, or $0.02 per share.   

Said John Sztykiel, Spartan's Chief Executive Officer, "The DSV and SCV segments again reported operating profits, and the performance of our ER group improved significantly from the first quarter of 2014.  We are seeing the benefits of better operational execution and greater commercial discipline throughout the organization.  We expect this positive trend to continue through the second half of 2014 as we execute our DRIVE strategy."

  • Vehicle sales revenue grew to $44.6 million from $38.6 million, with shipments of truck bodies and walk-in vans increasing year-over-year.  Vehicle shipments totaled 2,336 units in the second quarter of 2014, up from 2,059 units a year ago.  Despite growth in revenue and units produced, ongoing chassis shortages constrained truck body shipments during the second quarter.  DSV shipped 471 Reach units in the second quarter, of which 270 were newly redesigned models.  The remaining 201 Reach vehicles shipped during the quarter were units that were previously delayed due to a component shortage.
  • Sales of aftermarket parts and field service solutions declined 12.0% to $4.9 million in the second quarter of 2014.  During the quarter, DSV ramped up operations at a Saltillo, Mexico up-fit facility for Chrysler's Ram ProMaster van, which partially offset lower sales of other aftermarket products and services in the quarter.
  • Operating profit for the second quarter of 2014 was $1.7 million versus an operating loss of $1.6 million in 2013. The improvement in profitability for the quarter was due to growth in vehicle production volume, higher margins on the redesigned Reach that went into production during the second quarter of 2014, and greater operating efficiency at Bristol, which was in an early launch phase during the second quarter of 2013.
  • Backlog at June 30, 2014, stood at $63.0 million, which included 400 Reach units scheduled to be built and shipped during the third quarter of 2014.  Backlog at June 30, 2013 was $100.4 million, which included a 1,900-unit Reach order, while backlog at year-end 2013 was $73.1 million.    
  • Emergency Response revenue declined slightly during the second quarter to $42.1 million, from $43.8 million a year ago.  Lower revenue was a result of fewer chassis being shipped to external customers, an increase in chassis held in inventory for a 70-truck order from Peru and production delays due to a computer server malfunction at the Brandon, South Dakota facility.  Prior to the end of the second quarter, Spartan shipped the first group of 10 fire trucks to Peru.  The remainder of the Peru order is expected to be completed during the third quarter of 2014.   
  • The ER segment posted an operating loss of $1.5 million in the second quarter of 2014 compared to operating income of $0.4 million in the second quarter of 2013.  The operating loss was due to lower chassis sales to external customers and higher expenses due in part to the impact of the server malfunction.  On a sequential quarterly basis, the ER segment's operating loss was reduced by 60% from $3.7 million in the first quarter of 2014, as the Company made progress in improving operational performance and realized the positive effects of a more favorable product mix.
  • Backlog at June 30, 2014 was $165.1 million compared to $115.1 million at June 30, 2013.  Backlog at December 31, 2013 was $156.5 million.

Sztykiel commented on the ER segment, "Emergency Response is an important, strategic market for Spartan.  Our backlog has increased 43.4% from the second quarter of 2013, indicating the strength of the Spartan brand, but also resulting in longer wait times for customers.  To help reduce delivery times and leverage our flexible manufacturing base, Spartan intends to continue building certain fire truck models at its Charlotte campus after the completion of the Peru order. 

"In July, we committed additional resources and created a team dedicated specifically to accelerating the rate of change in the ER business.  This group is conducting a comprehensive review of the ER business from the order process through production and delivery to drive continuing improvements in operating performance.  We are confident the team's efforts will result in more efficient operations and ensure the ER segment achieves sustained profitability."