NOVI—Spartan Motors Inc. (Nasdaq: SPAR), the specialty vehicle manufacturer, reported net income of $7.9 million or 22 cents a share in the first quarter, up from $1.4 million or 4 cents a share in the same quarter of 2019. Revenue was $176.9 million, up from $172.2 million in the same quarter a year earlier.
Spartan divested its emergency response vehicle business effective Feb. 1.
“Despite the severity of the market conditions we are currently experiencing, we are pleased with the strong start to the year, as many of the transformative initiatives we pursued last year are gaining traction,” said Daryl Adams, Spartan president and CEO. “With the divestiture of ER, we benefited from operating in a more focused core market within an expanded geographic footprint, as a result of our recent acquisitions in the delivery and specialty vehicle markets. Though we continued to manufacture in this challenging environment, our operations were impacted by the pandemic. Near the end of the first quarter, we took a series of aggressive actions to mitigate the Covid impact, including actions to safeguard our employees and adjust production on a plant-by-plant basis to keep up with customer demand.”
Fleet vehicle sales and service segment sales increased 10.6 percent to $135.7 million from $122.6 million due to increased volume related to walk-in-van, truck body and upfits. Sales increased 50.9 percent, or $45.8 million, excluding the $32.7 million of chassis pass-through revenues from the US Postal Service order in the prior year.
Adjusted earnings before interest, taxes, depreciation and amortization for the segment rose to $21.7 million or 16 percent of sales a year earlier. The increase was primarily due to sales volume, product mix, lower material and component costs and the impact of pass-through revenues from the USPS order in the prior year.
The segment backlog at March 31 totaled $302.2 million, up 161.9 percent, compared to $115.4 million at March 31, excluding the one-time, multi-year USPS truck body order. This increase reflects strong demand for vehicles across the segment’s entire product portfolio.
Specialty chassis and vehicles segment sales fell 20.2 percent to $41.3 million from $51.7 million a year ago. This was primarily due to a decrease in luxury motor coach chassis sales, partially offset by sales from Royal Truck Body (Royal) as a result of the acquisition completed in September 2019.
Adjusted EBITDA decreased $1.2 million to $3.7 million, or 9 percent of sales, from $4.9 million, or 9.6 percent of sales, a year ago. The decrease was primarily due to lower luxury motor coach chassis and contract manufacturing sales volume, partially offset by the Royal acquisition.
The segment backlog at March 31 totaled $42.4 million, up 45.6% compared to $29.1 million at March 31, 2019, primarily due to the Royal acquisition.
Under the Cybersecurity & Infrastructure Security Agency (“CISA”) guidelines, Spartan’s products are considered essential and that allowed us to produce and finish vehicles to customers and dealers. These vehicles are used in critical applications, including shipping and delivery services, infrastructure maintenance, and federal, state, and local governments.
The company also withdrew its 2020 earnings guidance due to uncertainty caused by the coronavirus pandemic.
To listen to a conference call discussing these results, visit www.spartanmotors.com/investor-relations/webcasts.
Spartan Motors is a specialty vehicle maker for the commercial and retail vehicle industries (including last-mile delivery, specialty service and vocation-specific upfit markets), as well as for recreational vehicle markets. Its brands include Utilimaster, Royal Truck Body, Strobes-R-Us, Spartan Chassis, Spartan Authorized Parts, Spartan Authorized Service Centers, and Spartan Factory Service Centers.