Spartan Motors Reports Strong Operational Improvements in First Quarter

Manufacturer Exceeds Analyst Earnings Estimates for Second Straight Quarter



Apr 26, 2001, 01:00 ET from Spartan Motors, Inc.

    CHARLOTTE, Mich., April 26 /PRNewswire/ -- Buoyed by strong operational
 improvements in its core chassis business, Spartan Motors, Inc. (Nasdaq:   SPAR)
 today announced results for the first quarter ended March 31, 2001.
     Despite softer sales of its custom RV platforms, the Charlotte,
 Mich.-based manufacturer reported net earnings of $1.5 million, or $0.14 per
 share, for the first quarter of 2001, compared with net earnings of
 $2.0 million, or $0.16 per share, for the first quarter of 2000. Spartan
 Motors exceeded the earnings estimate of $0.09 per share from Red Chip Review
 -- the second consecutive quarter the Company has surpassed the street
 estimate.
     Spartan reported net sales of $58.7 million for the just-completed
 quarter, compared with net sales of $77.4 million for the same period in 2000.
 The decline reflects continued softness in the market for recreational vehicle
 platforms, offset partially by an 11 percent increase in sales of fire truck
 chassis.
     "Despite a tough sales environment, we were able to maintain our earnings
 momentum and continue our margin improvements," said John Sztykiel, president
 and chief operating officer of Spartan Motors. "We attribute this performance
 to the operational improvements in all our subsidiary operations.
     "We continue to benefit from measures put in place over the past 18 months
 that allow us to operate a leaner and more efficient organization, as
 evidenced by improved gross margins and lower operating expenses."
     During the first quarter, Spartan Motors reported a gross margin of
 15.6 percent, up from 14.8 percent during the same period in 2000. The Company
 said increased focus on cost management helped it reduce operating expenses
 6.3 percent, compared with the prior-year first quarter, despite the sales
 softness.
     Spartan Motors said its efforts to increase productivity and manage costs
 generated strong cash flow from operations. The Company reported $9.6 million
 in cash flow from continuing operations for the first quarter of 2001, up from
 $7.3 million in 2000. Focused inventory management helped Spartan improve its
 cash conversion cycle from 71.8 days in 2000 to 66.4 days in the first quarter
 of 2001. The Company said it paid down $8.6 million in long-term debt in the
 first quarter of 2001.
     "As with others in the RV industry, we expected to be challenged by softer
 sales during the first half of 2001," Sztykiel said. "Our focus on operational
 improvements, through programs such as Spartan Profit And Return (SPAR), has
 helped us weather this environment. We could see sales picking up during the
 second half of the year, and we will continue to reduce operating expenses in
 order to maintain a solid bottom line."
     The first quarter of 2001 marked Spartan Motors Chassis first full quarter
 under SPAR, a value-added financial, compensation and operating model. SPAR
 requires a return on investment over and above the cost of capital, and serves
 as the framework for evaluating all business initiatives.
     "These financial improvements demonstrate our commitment to increasing our
 bottom line," said Richard Schalter, chief financial officer and executive
 vice president. "We are pleased with the progress we have made, and look
 forward to making additional improvements in the quarters ahead."
     As a result of its stronger operations focus and higher sales of fire
 truck chassis, Spartan Motors Chassis reported that its gross margin was
 16.1 for the just-completed quarter, compared with 14.8 percent during the
 year-ago period.
     "We are pleased with the improved sales of our fire truck chassis, and
 expect that momentum will continue in the subsequent quarters," Sztykiel said.
 "As more apparatus manufacturers and fire departments recognize the benefit of
 custom chassis, we continue to take market share away from commercially built
 products."
     Schalter said, "While sales of our RV platforms have softened, we feel the
 Federal Reserve's lowering of interest rates will encourage consumer spending.
 The RV lifestyle remains popular, and consumers are continuing to buy new
 motorhomes -- they are looking for products that allow them to fully enjoy
 their time on the road."
     The Emergency Vehicle Team reported a sales increase of 4.3 percent during
 the first quarter of 2001, fueled by stronger sales of its custom fire trucks
 and ambulances. Luverne showed the strongest growth of the three subsidiaries,
 boosted by $7 million in orders for new fire trucks from fire departments in
 Chicago, Cleveland, Cincinnati, Ohio, and Tulsa, Okla.
     "It is great to see large cities look to Luverne for their premium fire
 trucks," said Jeff Lautt, president of Luverne Fire Apparatus.
     "We continue to improve the market penetration of our custom emergency
 vehicles as municipalities and other purchasing agencies continue to recognize
 the benefits of buying made-to-order products," Sztykiel said. "Orders were
 higher during the first quarter of 2001, and the EVTeam enjoys a strong
 backlog. We are working to translate some of the operational improvements we
 have made in our chassis business to our EVTeam subsidiaries, so that their
 contributions will make a bigger impact on our bottom line in the second half
 of 2001."
     "Effective in June, we will begin implementing a coordinated procurement
 process between all four business units. Over time, we expect to see
 significant reductions in costs, as we average the effective purchasing
 strengths of all four companies. While we are focused on growing sales and
 market penetration, we are just as focused on improving our corporate
 operational effectiveness."
     Spartan Motors, Inc. (www.spartanmotors.com) is a leading developer and
 manufacturer of custom platforms for recreational vehicles, fire trucks,
 ambulances and other specialty vehicles. The Company also owns fire and rescue
 vehicle manufacturers Luverne Fire Apparatus, Quality Manufacturing and Road
 Rescue, Inc.
     The statements contained in this news release include certain predictions
 and projections that may be considered forward-looking statements by the
 securities laws. These statements involve a number of risks and uncertainties,
 including but not limited to economic, competitive, governmental and
 technological factors affecting the Company's operations, markets, products,
 services and prices, and actual results may differ materially.
 
                     Spartan Motors, Inc. and Subsidiaries
                         Consolidated Income Statements
                   Three Months Ended March 31, 2001 and 2000
 
                                                     March 31,       March 31,
                                                       2000            2001
                                                       $-000           $-000
 
     Sales                                             77,395         58,658
     Cost of Sales                                     65,902         49,529
       Gross Profit                                    11,493          9,129
 
     Operating Expenses:
       Research and Development                         1,640          1,596
       Selling, General and Administrative              4,791          4,429
     Total Operating Expenses                           6,431          6,025
 
     Operating Income                                   5,062          3,104
 
     Other Income (Expense):
       Interest Expense                                 (344)          (527)
       Interest and Other Income                        (159)            105
     Total Other Income (Expense)                       (503)          (422)
 
     Earnings before Equity Investment and Taxes        4,559          2,682
 
     Taxes                                              1,609          1,214
 
     Net Earnings from Continuing Ops.                  2,950          1,468
 
     Discontinued Operations:
       Loss from Operations-Carpenter                     981             --
       Loss on Closure-Carpenter                           --             --
 
     Net Earnings                                       1,969          1,468
 
     EPS-Continuing Operations                           0.24           0.14
     EPS-Loss from Operations-Carpenter                (0.08)             --
     EPS-Loss on Closure of Carpenter                      --             --
       Net Earnings per Share                            0.16           0.14
 
     Weighted Average Shares                           12,157         10,518
 
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SOURCE Spartan Motors, Inc.
    CHARLOTTE, Mich., April 26 /PRNewswire/ -- Buoyed by strong operational
 improvements in its core chassis business, Spartan Motors, Inc. (Nasdaq:   SPAR)
 today announced results for the first quarter ended March 31, 2001.
     Despite softer sales of its custom RV platforms, the Charlotte,
 Mich.-based manufacturer reported net earnings of $1.5 million, or $0.14 per
 share, for the first quarter of 2001, compared with net earnings of
 $2.0 million, or $0.16 per share, for the first quarter of 2000. Spartan
 Motors exceeded the earnings estimate of $0.09 per share from Red Chip Review
 -- the second consecutive quarter the Company has surpassed the street
 estimate.
     Spartan reported net sales of $58.7 million for the just-completed
 quarter, compared with net sales of $77.4 million for the same period in 2000.
 The decline reflects continued softness in the market for recreational vehicle
 platforms, offset partially by an 11 percent increase in sales of fire truck
 chassis.
     "Despite a tough sales environment, we were able to maintain our earnings
 momentum and continue our margin improvements," said John Sztykiel, president
 and chief operating officer of Spartan Motors. "We attribute this performance
 to the operational improvements in all our subsidiary operations.
     "We continue to benefit from measures put in place over the past 18 months
 that allow us to operate a leaner and more efficient organization, as
 evidenced by improved gross margins and lower operating expenses."
     During the first quarter, Spartan Motors reported a gross margin of
 15.6 percent, up from 14.8 percent during the same period in 2000. The Company
 said increased focus on cost management helped it reduce operating expenses
 6.3 percent, compared with the prior-year first quarter, despite the sales
 softness.
     Spartan Motors said its efforts to increase productivity and manage costs
 generated strong cash flow from operations. The Company reported $9.6 million
 in cash flow from continuing operations for the first quarter of 2001, up from
 $7.3 million in 2000. Focused inventory management helped Spartan improve its
 cash conversion cycle from 71.8 days in 2000 to 66.4 days in the first quarter
 of 2001. The Company said it paid down $8.6 million in long-term debt in the
 first quarter of 2001.
     "As with others in the RV industry, we expected to be challenged by softer
 sales during the first half of 2001," Sztykiel said. "Our focus on operational
 improvements, through programs such as Spartan Profit And Return (SPAR), has
 helped us weather this environment. We could see sales picking up during the
 second half of the year, and we will continue to reduce operating expenses in
 order to maintain a solid bottom line."
     The first quarter of 2001 marked Spartan Motors Chassis first full quarter
 under SPAR, a value-added financial, compensation and operating model. SPAR
 requires a return on investment over and above the cost of capital, and serves
 as the framework for evaluating all business initiatives.
     "These financial improvements demonstrate our commitment to increasing our
 bottom line," said Richard Schalter, chief financial officer and executive
 vice president. "We are pleased with the progress we have made, and look
 forward to making additional improvements in the quarters ahead."
     As a result of its stronger operations focus and higher sales of fire
 truck chassis, Spartan Motors Chassis reported that its gross margin was
 16.1 for the just-completed quarter, compared with 14.8 percent during the
 year-ago period.
     "We are pleased with the improved sales of our fire truck chassis, and
 expect that momentum will continue in the subsequent quarters," Sztykiel said.
 "As more apparatus manufacturers and fire departments recognize the benefit of
 custom chassis, we continue to take market share away from commercially built
 products."
     Schalter said, "While sales of our RV platforms have softened, we feel the
 Federal Reserve's lowering of interest rates will encourage consumer spending.
 The RV lifestyle remains popular, and consumers are continuing to buy new
 motorhomes -- they are looking for products that allow them to fully enjoy
 their time on the road."
     The Emergency Vehicle Team reported a sales increase of 4.3 percent during
 the first quarter of 2001, fueled by stronger sales of its custom fire trucks
 and ambulances. Luverne showed the strongest growth of the three subsidiaries,
 boosted by $7 million in orders for new fire trucks from fire departments in
 Chicago, Cleveland, Cincinnati, Ohio, and Tulsa, Okla.
     "It is great to see large cities look to Luverne for their premium fire
 trucks," said Jeff Lautt, president of Luverne Fire Apparatus.
     "We continue to improve the market penetration of our custom emergency
 vehicles as municipalities and other purchasing agencies continue to recognize
 the benefits of buying made-to-order products," Sztykiel said. "Orders were
 higher during the first quarter of 2001, and the EVTeam enjoys a strong
 backlog. We are working to translate some of the operational improvements we
 have made in our chassis business to our EVTeam subsidiaries, so that their
 contributions will make a bigger impact on our bottom line in the second half
 of 2001."
     "Effective in June, we will begin implementing a coordinated procurement
 process between all four business units. Over time, we expect to see
 significant reductions in costs, as we average the effective purchasing
 strengths of all four companies. While we are focused on growing sales and
 market penetration, we are just as focused on improving our corporate
 operational effectiveness."
     Spartan Motors, Inc. (www.spartanmotors.com) is a leading developer and
 manufacturer of custom platforms for recreational vehicles, fire trucks,
 ambulances and other specialty vehicles. The Company also owns fire and rescue
 vehicle manufacturers Luverne Fire Apparatus, Quality Manufacturing and Road
 Rescue, Inc.
     The statements contained in this news release include certain predictions
 and projections that may be considered forward-looking statements by the
 securities laws. These statements involve a number of risks and uncertainties,
 including but not limited to economic, competitive, governmental and
 technological factors affecting the Company's operations, markets, products,
 services and prices, and actual results may differ materially.
 
                     Spartan Motors, Inc. and Subsidiaries
                         Consolidated Income Statements
                   Three Months Ended March 31, 2001 and 2000
 
                                                     March 31,       March 31,
                                                       2000            2001
                                                       $-000           $-000
 
     Sales                                             77,395         58,658
     Cost of Sales                                     65,902         49,529
       Gross Profit                                    11,493          9,129
 
     Operating Expenses:
       Research and Development                         1,640          1,596
       Selling, General and Administrative              4,791          4,429
     Total Operating Expenses                           6,431          6,025
 
     Operating Income                                   5,062          3,104
 
     Other Income (Expense):
       Interest Expense                                 (344)          (527)
       Interest and Other Income                        (159)            105
     Total Other Income (Expense)                       (503)          (422)
 
     Earnings before Equity Investment and Taxes        4,559          2,682
 
     Taxes                                              1,609          1,214
 
     Net Earnings from Continuing Ops.                  2,950          1,468
 
     Discontinued Operations:
       Loss from Operations-Carpenter                     981             --
       Loss on Closure-Carpenter                           --             --
 
     Net Earnings                                       1,969          1,468
 
     EPS-Continuing Operations                           0.24           0.14
     EPS-Loss from Operations-Carpenter                (0.08)             --
     EPS-Loss on Closure of Carpenter                      --             --
       Net Earnings per Share                            0.16           0.14
 
     Weighted Average Shares                           12,157         10,518
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X47153192
 
 SOURCE  Spartan Motors, Inc.