Spartan Motors, Inc. (NASDAQ: SPAR) reported 2014 net income of $1.2 million, or $0.03 per share, versus a net loss of $6.0 million, or ($0.18) per share in 2013.
For the fourth quarter of 2014, Spartan reported a net loss of $0.1 million, or ($0.00) per share, compared to a net loss of $3.0 million, or ($0.09) per share, in the fourth quarter of 2013.
As announced in December, Daryl Adams assumed the role of President and Chief Executive Officer of Spartan Motors, on February 19. He replaced John Sztykiel, who retired from the Company after 30 years of service.
Regarding the management transition, Sztykiel stated, "It has been a privilege to be part of Spartan for the past 30 years, including the last 24 years as President and 12 years as CEO. During my time with the Company, revenues have grown to more than $500 million from less than $10 million and we are now assembling more than 17,000 specialty vehicles per year. I have every confidence in Daryl's leadership, his team and the direction he has set for the Company. I leave Spartan on a positive note, with a solid order backlog and balance sheet, as well as some of the strongest brands in the business. I am confident the Company's best years lie ahead."
For the full year 2014 compared to the full year 2013:
- Revenue of $506.8 million, up 7.9%, versus $469.5 million
- Gross margin of 12.4% versus 11.3%
- Operating loss of $1.2 million versus an operating loss of $8.2 million
- Net income of $1.2 million, or $0.03 per share, compared to a net loss of $6.0 million, or ($0.18) per share
- Backlog of $243.7 million versus $242.7 million
FOURTH QUARTER 2014 OVERVIEW
For the fourth quarter of 2014 compared to the fourth quarter of 2013, Spartan reported:
- Net sales of $118.8 million, down 6.1%
- Gross margin of 13.1% versus 11.8%
- Operating loss of $1.9 million compared to operating loss of $4.2 million
- Net loss of $0.1 million, or ($0.00) per share, versus a net loss of $3.0 million, or ($0.09) per share
Daryl Adams, Spartan's Chief Executive Officer, stated, "Spartan ended 2014 on a positive note, posting a net profit for the year, its first since 2011. Revenue increased nearly 8% and gross margin improved by more than a full percentage point, demonstrating substantial progress in 2014. Our Delivery & Service Vehicles (DSV) and Specialty Chassis & Vehicles (SCV) segments performed well and were profitable for the year, with DSV reporting growth in revenue and operating income. The Emergency Response (ER) body business continued to be our most serious challenge throughout 2014 and will be the primary focus of our operational improvement efforts during 2015."
Adams continued, "Our operational plan for 2015 is straightforward: instill a culture of One Spartan throughout the organization and execute on our five focal priorities:
- Fix the Emergency Response body business
- Improve Operational Discipline and Performance
- Follow Lean Principles and Continuous Improvement
- Reduce Quality and Warranty Expense
- Strengthen the Team
These priorities represent the first steps in a multi-year plan to elevate Spartan's financial and operational performance in order to provide the meaningful returns our shareholders expect. This consistent focus on operations represents a new direction that allows us to capitalize on our strong financial position and the Spartan brand."
Revenue for the full year totaled $506.8 million versus $469.5 million due to growth in the DSV and ER segments. DSV revenue growth benefitted from a full year of production at the Bristol facility which was in ramp-up mode during the first half of 2013. Growth in the ER segment resulted from a shift in the product mix toward more complete fire trucks, including a 70-unit order from Peru. Production delays resulting from the loss of data servers and the impact of transferring production from the Ocala, Fla., facility to the Charlotte, Mich., and Brandon, S.Dak., locations constrained ER segment revenue growth.
Fourth quarter 2014 revenue of $118.8 million declined 6.1% from the prior year due to lower sales in the DSV and SCV segments. The Company reported an operating loss of $1.9 million for the fourth quarter, including ER restructuring expenses of $1.9 million. Spartan booked tax credits of $1.6 million in the quarter, resulting in a net loss of $0.1 million in the fourth quarter compared to a net loss of $3.0 million in the prior-year period.