Spartan Motors, Inc. (NASDAQ: SPAR) posted a net loss of $2.9 million or ($0.09) per share on revenue of $128.4 million in the first quarter versus a net loss of $2.1 million, or ($0.06) per share in the first quarter of 2014. Results for the first quarter of 2015 include pre-tax restructuring expenses of $1.2 million in Spartan's Emergency Response (ER) segment.
For the first quarter of 2015 compared to the first quarter of 2014:
- Net sales of $128.4 million, up 0.3% from $128.0 million
- Gross margin of 10.7% of sales versus 10.0%
- Operating loss of $4.4 million versus an operating loss of $3.5 million
- Net loss of $2.9 million, or ($0.09) per share, versus a net loss of $2.1 million, or ($0.06) per share
- Order backlog increased to $264.0 million at March 31, 2015, from $243.7 million at December 31, 2014
Daryl Adams, Spartan's Chief Executive Officer, stated, "Continuous improvement and incremental progress characterized the first quarter of 2015. Turning around the performance of the ER segment's body business remains Spartan's top priority and received most of our attention during the quarter. The ER segment's revenue increased and body production improved throughout the quarter as we reduced bottlenecks in our production processes. More work and investment is required, but I am encouraged by the progress made and am confident we have the right plan and team in place.
"The Delivery & Service Vehicles (DSV) and Specialty Chassis & Vehicles (SCV) segments both performed well during the quarter, reporting higher profitability compared to the first quarter of 2014. DSV produced most of a 665-unit walk-in van order during the first quarter, with the remainder shipped early in the second quarter. DSV experienced a favorable product mix in its truck body line, along with higher Aftermarket and Service revenue versus last year. SCV posted revenue growth due to a favorable mix of motorhome chassis, along with growth in Aftermarket Parts revenue. DSV and SCV ended the first quarter of 2015 with positive momentum heading into the seasonally stronger second and third quarters."
Delivery & Service Vehicles (DSV)
- Total revenue declined from the first quarter of 2014 due to lower vehicle production, partially offset by higher aftermarket revenue. Vehicle production was constrained by a shortage of cutaway van chassis as well as an issue with a walk-in van component supplier. The supplier issue resulted in the shipment of approximately 120 units of a 665-unit order in the second quarter of 2015 rather than in the first quarter.
- DSV shipped 1,921 vehicles in the first quarter of 2015 compared to 2,752 vehicles. Sales of aftermarket parts and field service solutions increased 3.7% to $6.9 million.
- Operating profit was $2.6 million in the first quarter of 2015, up slightly from the prior year despite lower revenue. Growth in aftermarket parts and service revenue, along with a favorable mix in vehicle production, resulted in a higher operating profit margin compared to last year.
- In March, DSV introduced a new delivery vehicle, the Velocity. The Velocity is based on the new Ford Transit van that offers diesel, gasoline, and two alternative-fuel engine options. Innovative features of the Velocity include a curb-side sliding door to reduce driver entry/exit time, thereby raising efficiency.
- The DSV segment's backlog at the end of the first quarter of 2015 totaled $87.5 million compared to $60.6 million at the end of 2014, primarily due to an increase in truck body orders.
Emergency Response (ER)
- ER segment revenue increased 20.2% to $43.2 million mainly due to higher cab and chassis sales. Body sales increased slightly from the prior year as production rates increased throughout the first quarter of 2015. During the first quarter, a 21-unit export order entered production and is expected to ship in the second quarter of 2015.
- The ER segment posted an operating loss of $5.4 million in the first quarter of 2015 compared to an operating loss of $3.7 million. Operating losses in the first quarter of 2015 include restructuring charges of $1.2 million plus additional expenses related to turnaround efforts in the fire truck body business.
- Backlog decreased to $157.5 million at March 31, 2015, compared to $160.7 million at December 31, 2014.
Specialty Chassis & Vehicles (SCV)
- The SCV segment reported higher revenue and operating income in the first quarter of 2015 compared to the prior year. Segment revenue increased 12.8% to $30.3 million from $26.8 million with sales of motorhome and bus chassis climbing 7.2% to $23.3 million from $21.8 million. Aftermarket Parts & Assemblies (APA) revenue rose to $4.4 million from $3.0 million.
- Operating income increased to $1.0 million in the first quarter of 2015 from $0.6 million. Growth in operating income was driven by higher APA revenue and favorable motorhome chassis mix.
- Backlog at March 31, 2015 totaled $19.1 million versus $22.4 million at December 31, 2014.