Spartan Motors Inc., parent to Spartan Chassis Inc., reported that sales for its fourth quarter declined 6.1% to $118.8 million from $126.45 million the year prior. During the period, the company incurred a net loss of $100,ooo, or 0 cents per share, versus a net loss of $3 million, or 9 cents per share.
Spartan’s Specialty Chassis & Vehicles (SCV) segment reported lower revenue for the fourth quarter of 2014 due to lower sales of motorhome and bus chassis, plus lower demand for aftermarket parts and assemblies exceeding the increase in Isuzu N-series truck production. Revenue for the fourth quarter was $29.6 million compared to $34.8 million. Operating income also declined, to $2.4 million in the fourth quarter of 2014, from $3.2 million a year ago.
For the full year, Spartan posted revenue of $506.8 million, up 7.9%, versus $469.5 million in 2013. The company posted 12-month net income of $1.2 million, or 3 cents per share, compared to a net loss of $6 million, or 18 cents per share, the previous year.
Spartan CEO Daryl Adams, who replaced John Sztykiel on Feb. 19, 2015, 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.”
Spartan reported that it is implementing a multi-year operational performance plan based on five focal points. The plan is designed to produce profitable growth and increase operating margins and will initially focus on the ER segment, Spartan’s only unprofitable business. Adams noted, “Our first priority is to fix the ER business, specifically the body business that continues to struggle. The restructuring plan announced in 2014 will continue and we will invest as needed in the short term to maximize our returns in the future. As with all investments, we incur the cost up-front, which is a contributing factor to our expected first-quarter loss.”
He added, “Our operational performance plan and the five focal priorities are comprehensive, but not complicated. Reaching Spartan’s full potential for growth and operating performance will be a multi-year task, but we will see incremental payoff throughout the process. The team and I have done this before and I am confident in the team and our ability to deliver better financial results. I look forward to updating you on our progress as we move deliberately and decisively toward our shared goals.”
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