Spartan Motors has reported operating results for the first quarter ending March 31, showing sales were up 35% to $234 million compared to $173 million at the same period last year.
“We are pleased with the positive start to the year, as many of the initiatives we pursued last year are gaining traction,” said Daryl Adams, president and CEO. “With the hard work and concentrated efforts of our entire team, we were able mitigate continued tariff-related commodity headwinds and post solid operating results to start the year. We also achieved new business wins in several key markets in all three of our business units, which we expect will help drive our results for the remainder of the year.”
For the first quarter of 2019 compared to the first quarter of 2018:
- As anticipated, the first quarter 2019 results included incremental tariff-related commodity cost increases and higher component costs totaling $2.3 million that negatively impacted net income, adjusted net income, and adjusted EBITDA.
- Net income decreased to $1.4 million from $4.2 million.
- Adjusted EBITDA decreased 17.9% to $4.6 million from $5.6 million, or 3.2% of sales.
- Adjusted net income decreased $1.8 million, or 54.5%, to $1.5 million from $3.3 million. Excluding the $1.4 million tax benefit from the first quarter of 2018, adjusted net income decreased $0.4 million, or 21.1%, from the prior year.
“The hard work, resourcefulness and determination of our teams have set a positive foundation for long-term performance,” said Adams. “Each business unit has made progress on several fronts, and we are confident that this effort has set the stage for sustained revenue growth, improved profitability and broader geographic reach.”
The specialty chassis and vehicle (SCV) business unit continued to drive growth and operating performance through product innovation and market share gains within the luxury motor coach segment, according to Spartan Motors.
This was particularly so in the faster-growing, less-than-40-foot diesel market, which is favored by younger consumers. Additionally, SCV continues to grow its relationships with existing customers through exclusive supply agreements, highlighting the demand for Spartan chassis within the luxury diesel motor coach segment, the company stated.
Spartan Motors attributes these wins to its innovation efforts to integrate automotive technology into the luxury motor coach market. For example, Spartan chassis now utilizes Mobile Eye, which includes pedestrian detection, speed limit sign detection, vehicle-ahead indicator, and forward-collision warning to the luxury motor coach segment.
SCV segment sales increased 7.2% to $51.7 million from $48.2 million a year ago, representing continued growth on top of a 46% growth rate in the prior year.
Revenues were driven mainly by increased contract manufacturing and pricing from luxury motor coach chassis sales, offset by lower sales of Reach vehicles due to timing.
Adjusted EBITDA increased $1.9 million to $5 million, or 9.6% of sales, from $3.1 million, or 6.5% of sales, a year ago, mainly due to mix from increased contract manufacturing, partially offset by higher material costs.
The segment backlog at March 31 totaled $29.1 million, essentially flat compared to $29.7 million at March 31, 2018, reflecting pricing from luxury motor coach, as well as strength in contract manufacturing.
