Spartan Motors Inc. reported its best third quarter in company history, with a nearly 60% year-over-year increase in revenues and a greater than five-fold increase in net earnings, despite a drag from its faltering Class A diesel RV chassis business.
Spartan reported record third quarter net earnings of $14.7 million on net sales of $237.5 million for the quarter ended Sep. 30, 2008, compared with net earnings of $2.6 million on net sales of $148.9 million in the same quarter of 2007.
Through the first nine months of 2008, Spartan’s sales increased 57.1% and net earnings grew 144.6% compared to the nine-month period in 2007.
“This was an excellent quarter for Spartan, especially given the tumultuous national economic environment,” said John Sztykiel, president and CEO of Spartan Motors. “Our market diversification and flexible manufacturing model continue to allow us to grow and profitably compete in difficult times. During the quarter, we ramped up production rapidly and efficiently to complete a sizable military order.
“The RV market is difficult and while we have initiatives in place, it is a very challenging environment.”
Sales at Spartan Chassis, the company’s largest subsidiary and operating unit, increased 61.4% year-over year to $224.2 million for the current quarter. Spartan Chassis represented 94.4% of Spartan Motors’ total consolidated sales in the 2008 third quarter, and third quarter earnings at Spartan Chassis improved 229.9%.
However, Spartan’s chassis sales to the Class A diesel motorhome market decreased 67.4% year-over-year in the quarter. Spartan’s backlog for RV chassis decreased 65.2% year-over-year to $9.1 million as of Sept. 30, 2008.
“The outlook for motorhome chassis remains uncertain, though there are indications that many dealers have reduced inventory to razor-thin levels, as the industry is reporting retail sales for Class A motorhomes are three times more than wholesale levels,” Sztykiel said. “This situation may bolster demand once the industry begins its eventual recovery. Nonetheless, the motorhome chassis market is expected to be challenging over the next two to three quarters, and we have adjusted our operations accordingly.”