Spartan Motors Inc. (SPAR, Financial) filed Quarterly Report for the period ended 2009-03-31.
Spartan is a leading designer engineer and manufacturer of customheavy-duty chassis. The Company's chassis consist of a frame assemblyengine transmission electrical systems running gear (wheels tiresaxles suspension and brakes) and for some applications a cab. TheCompany's customers are original equipment manufacturers (``OEMs``) whocomplete their vehicle product by mounting the body or apparatus on aSpartan chassis. Spartan Motors Inc. has a market cap of $294.5 million; its shares were traded at around $9.04 with a P/E ratio of 7.4 and P/S ratio of 0.3. The dividend yield of Spartan Motors Inc. stocks is 1.1%. Spartan Motors Inc. had an annual average earning growth of 18% over the past 10 years. GuruFocus rated Spartan Motors Inc. the business predictability rank of 3-star.
Net earnings decreased $8.7 million ($0.27 per diluted share) from $14.8 million ($0.46 per diluted share) in 2008 to $6.1 million ($0.19 per diluted share) in 2009 as a result of the factors discussed above.
At March 31, 2009, the Company had $217.5 million in backlog which includes for the first time service parts and accessories which were $47.8 million, compared with a backlog of $304.6 million at March 31, 2008 which did not include service parts and accessories. The decrease in backlog period over period is primarily from Spartan Chassis. Its backlog decreased $96.4 million partially offset by an increase in EVTeam backlog of $21.7 million. Intercompany eliminations in the backlog increased $12.4 million related to chassis sales to the EVTeam. The Company anticipates filling its current backlog orders by October 2009.
For the three months ended March 31, 2009, cash generated by operating activities was $15.1 million, which was a $41.7 million increase from the $26.6 million of cash used in operating activities for the three months ended March 31, 2008. The $15.1 million of cash generated in 2009 was primarily due to decreased working capital needs at Spartan Chassis with the decrease in sales levels in the quarter. See the Results of Operations section contained in Item 2 of this Form 10-Q for further information regarding the decrease in sales levels. On a consolidated basis, the net impact of changes in accounts receivable, inventory and accounts payable, which are the largest drivers of working capital changes, represented the largest source of cash at $12.1 million. An additional source of cash came from deposits from customers of $1.4 million. See the Condensed Consolidated Statements of Cash Flows contained in Item 1 of this Form 10-Q for the various factors that represented the remaining fluctuation of $1.6 million in cash generated from operations during the period.
Shareholders' equity increased $5.9 million, from $170.6 million as of December 31, 2008 to $176.5 million as of March 31, 2009. The increase was driven by $6.1 million in net income and another $0.4 million from compensation related to restricted stock. These were partially offset by $0.4 million used to repurchase stock and a net $0.2 million reduction from the issuance of stock that was more than offset by the cancelation of stock appreciation rights during the quarter.
-18- On February 17, 2009, the Board of Directors approved a special dividend of $0.03 per common share to shareholders of record on April 15, 2009 in recognition of the Company's 2008 financial performance. Additionally, in recognition of the Company's financial strength and future prospects, the Board of Directors has continued to approve the payment of regular dividends to its shareholders. At this same meeting, regular dividends of $0.10 per share payable in the amount of $0.05 per share on May 15, 2009 and $0.05 per share on December 16, 2009 to shareholders of record on April 15, 2009 and November 16, 2009, respectively, were declared.
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Spartan is a leading designer engineer and manufacturer of customheavy-duty chassis. The Company's chassis consist of a frame assemblyengine transmission electrical systems running gear (wheels tiresaxles suspension and brakes) and for some applications a cab. TheCompany's customers are original equipment manufacturers (``OEMs``) whocomplete their vehicle product by mounting the body or apparatus on aSpartan chassis. Spartan Motors Inc. has a market cap of $294.5 million; its shares were traded at around $9.04 with a P/E ratio of 7.4 and P/S ratio of 0.3. The dividend yield of Spartan Motors Inc. stocks is 1.1%. Spartan Motors Inc. had an annual average earning growth of 18% over the past 10 years. GuruFocus rated Spartan Motors Inc. the business predictability rank of 3-star.
Highlight of Business Operations:
For the three months ended March 31, 2009, consolidated sales decreased $148.6 million (56.3%) compared to sales for the same period in 2008. The decrease was primarily due to a $147.1 million (60.0%) decrease in Spartan Chassis sales. Other sales, which include specialty chassis, and motorhome sales, together, drove the decrease in Spartan Chassis sales. Other sales decreased $115.7 million (65.2%) quarter over quarter as a result of lower vehicle sales to the defense industry with the completion of several large military orders, particularly under the MRAP program. This reduction was driven by the timing and nature of the related military contracts. Motorhome sales decreased $34.9 million (91.7%) compared to the same three month period in 2008. The decrease in motorhome chassis sales was primarily a result of the weakened economic conditions impacting the motorhome market as a whole. These decreases were partially offset by fire truck chassis sales, which increased $3.5 million (11.8%) compared to the prior year. Changes to industry safety regulations and the 2010 engine emission standards, resulted in increased demand and thus sales for fire truck chassis.Net earnings decreased $8.7 million ($0.27 per diluted share) from $14.8 million ($0.46 per diluted share) in 2008 to $6.1 million ($0.19 per diluted share) in 2009 as a result of the factors discussed above.
At March 31, 2009, the Company had $217.5 million in backlog which includes for the first time service parts and accessories which were $47.8 million, compared with a backlog of $304.6 million at March 31, 2008 which did not include service parts and accessories. The decrease in backlog period over period is primarily from Spartan Chassis. Its backlog decreased $96.4 million partially offset by an increase in EVTeam backlog of $21.7 million. Intercompany eliminations in the backlog increased $12.4 million related to chassis sales to the EVTeam. The Company anticipates filling its current backlog orders by October 2009.
For the three months ended March 31, 2009, cash generated by operating activities was $15.1 million, which was a $41.7 million increase from the $26.6 million of cash used in operating activities for the three months ended March 31, 2008. The $15.1 million of cash generated in 2009 was primarily due to decreased working capital needs at Spartan Chassis with the decrease in sales levels in the quarter. See the Results of Operations section contained in Item 2 of this Form 10-Q for further information regarding the decrease in sales levels. On a consolidated basis, the net impact of changes in accounts receivable, inventory and accounts payable, which are the largest drivers of working capital changes, represented the largest source of cash at $12.1 million. An additional source of cash came from deposits from customers of $1.4 million. See the Condensed Consolidated Statements of Cash Flows contained in Item 1 of this Form 10-Q for the various factors that represented the remaining fluctuation of $1.6 million in cash generated from operations during the period.
Shareholders' equity increased $5.9 million, from $170.6 million as of December 31, 2008 to $176.5 million as of March 31, 2009. The increase was driven by $6.1 million in net income and another $0.4 million from compensation related to restricted stock. These were partially offset by $0.4 million used to repurchase stock and a net $0.2 million reduction from the issuance of stock that was more than offset by the cancelation of stock appreciation rights during the quarter.
-18- On February 17, 2009, the Board of Directors approved a special dividend of $0.03 per common share to shareholders of record on April 15, 2009 in recognition of the Company's 2008 financial performance. Additionally, in recognition of the Company's financial strength and future prospects, the Board of Directors has continued to approve the payment of regular dividends to its shareholders. At this same meeting, regular dividends of $0.10 per share payable in the amount of $0.05 per share on May 15, 2009 and $0.05 per share on December 16, 2009 to shareholders of record on April 15, 2009 and November 16, 2009, respectively, were declared.
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