With strong performances from across its business segments, specialty vehicle builder Spartan Motors Inc. reported revenues for the first quarter rose 4% to $173 million, led by luxury motor coach chassis sales, improved product mix, and higher volumes at its up-fit centers. Net income was $4.2 million, compared to a loss of $1.1 million in the first quarter last year.
"We really hit the ground running in 2018, as we experienced another strong, consecutive quarter of profitable growth," said Daryl Adams, president and CEO. "The robust start to the year was driven by the ongoing efforts of our entire team to generate continued operational improvement as well as strong growth in our core markets."
In a conference call with investment analysts, Adams reports that gross profit margin improved 300 basis points to 12.8% of sales from 9.8%. Spartan reported a backlog at the end of the quarter of $554.6 million, up 57.9%.
“We have also benefited from the initiatives we've put in place to grow our business,” Adams said. “New business wins like the USPS contract, innovative products in both luxury motor coach and ER [emergency response], and new markets like our entry into the smaller luxury motor coach chassis, are all driving growth for Spartan.”
During the quarter Spartan completed first article inspection and validated the build specifications with the USPS team, Adams added. The company has begun hiring and training personnel, and produced several units in April.
“We are on target to meet our launch curve and scheduled production for the rest of the year,” he said.
Spartan also began production on additional walk-in van fleet orders in 2018 with three major customers, which in aggregate totaled over 2,900 vehicles. In terms of new products, Adams cited investment in electric walk-in vans and the integration of refrigeration in last mile vehicles to support the growing market of home delivery of fresh produce.
Spartan has also worked to improve its dealer network.
“We continue to grow our dealer base in the right states and rationalize the ones that aren't performing. And it's interesting because as we continue to improve our ER segment, we have a number of dealers from our competitors coming over and asking if they can join the Spartan team,” Adams said. “We are making good business decisions, taking care of our dealers, rationalizing the product, operational improvements, quality improvements, reducing warranty costs. So, I'd tell you, it's not one silver bullet, it's a bunch of levers that we are pulling, and over the last few years we have shown that we know how to do that.”
