Spartan Motors has reported operating results for the third quarter ended Sept. 30 showing that sales increased $37 million, or 20 percent, to $226 million, from $189 million. However, tariff-driven increases in commodity and component costs, chassis shortages, supplier component delays, freight costs and disruptions, and labor shortages, resulted in production and labor inefficiencies and shipment delays.
Net income decreased $8.3 million, or 61.5 percent, to $5.2 million from $13.5 million. The prior year net income includes the benefit from a $6.3 million tax valuation allowance adjustment due to the company’s improved financial condition.
The specialty chassis and vehicle segment sales increased 5.5 percent to $51.7 million from $49 million a year ago. Revenues were driven mainly by a $1.9 million increase in luxury motor coach chassis sales, due to increased unit volume driven by market share gains and continued industry demand.
The segment backlog at Sept. 30 totaled $34 million, up 6.6 percent, compared to $31.9 million at Sept. 30, 2017.
“The underlying business fundamentals in each of our business segments remain strong, as indicated by our strong backlog, despite the increased industry-wide headwinds,” said Matt Long, interim CFO. “We remain encouraged by the continued strength of orders across all of our business segments. As we head into the remainder of the year, we have taken proactive steps and cost reduction actions to help mitigate the unfavorable market conditions experienced in the third quarter.”
Based on year-to-date results, the company is adjusting its previous guidance for 2018 as follows:
- Revenue to be in the range of $790 – $815 million, unchanged
- Net income of $14.4 – $16.4 million, changed from $20.2 – $22.4 million
