Spartan Motors, Inc. today reported a 41.0 percent increase in net earnings for the year ended December 31, 2005, bolstered by increased profits in the fourth quarter. Spartan said increased sales of its fire truck chassis and fire trucks, along with revenue from its military vehicles contract, were the main growth drivers for the quarter and year.
Spartan Motors, a leading manufacturer of custom motorhome chassis, fire truck chassis and emergency-rescue vehicles, reported earnings of $986,000, or $0.08 per diluted share, on net sales of $75.5 million for the fourth quarter of 2005, compared with net earnings of $395,000, or $0.03 per diluted share, on net sales of $80.3 million for the fourth quarter of 2004.
The most recent quarterly results were Spartan Motors' fourth consecutive quarter of improved earnings when compared to the same quarter of the prior year, reflecting the strength of its largest operating unit, Spartan Chassis, as well as continued improvement at its other subsidiary companies.
For the year ended December 31, 2005, Spartan reported a 41.0 percent increase in profits, posting net earnings of $8.3 million, or $0.65 per diluted share, on record net sales of $343.0 million, compared with net earnings of $5.9 million, or $0.46 per diluted share, on net sales of $312.3 million for the prior year.
The Company said it had record orders for the year for fire truck chassis and fire trucks, as well as a strong backlog across the board. Consolidated backlog was $167.8 million as of December 31, 2005, compared with backlog of $146.7 million at the end of the third quarter of 2005 and $117.6 million at the end of the prior year's fourth quarter, a 42 percent increase year-over- year. Spartan Motors anticipates filling all of its current backlog orders by December 31, 2006.
Spartan Chassis, the company's largest operating subsidiary, reported improved earnings and profitability for the fourth quarter compared to the prior year, driven by increased sales of fire truck chassis and military vehicle chassis. This gain during the quarter was somewhat offset by softer sales of recreational vehicle (RV) chassis and a loss at Spartan's Emergency Vehicle Team (EVTeam), though the team cut its loss nearly 40 percent compared to the fourth quarter of 2004. Spartan's EVTeam consists of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries.
"On the whole, we are pleased with the progress we made this year, especially considering that the RV market had a soft year," said John Sztykiel, president and CEO of Spartan Motors. "Our core Spartan Chassis business continues to perform very well with increased sales, profitability and record orders for fire truck chassis for the year. It also benefited from the military contract with Force Protection, Inc. for the Cougar military vehicle."
"At the same time, because of softer market conditions, our sales for RV chassis for 2005 were slightly less than last year," Sztykiel said. "However, we did gain profitable market share as evidenced by the fact unit shipments of Class A motorhomes were down 18.1 percent while our RV unit shipments declined by only 2.3 percent. We expect our RV chassis sales in 2006 to outpace 2005 because of our increased motorhome model presence and an overall improvement in the RV market. The EVTeam as a whole is on track to substantially reduce its loss in 2006 compared to 2005, as each of its companies moves toward profitability within its own timeframe."
Spartan reported its gross margin improved to 14.8 percent in the fourth quarter of 2005, compared with 11.9 percent for the same period in 2004, due to operating improvements as well as better pricing to match material cost increases. Likewise, operating margin also improved to 1.9 percent in the fourth quarter of 2005, compared with 1.1 percent in the same quarter of 2004.
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