Spartan Motors reported net losses in the third quarter, despite a significant increase in motorhome chassis revenue during the quarter.
The company’s emergency response division accounted for much of the loss, reporting a 30 percent drop in revenue – reflected in a $6 million loss in operating income – compared to the third quarter of 2014.
Spartan reported a 38 percent boost from motorhome chassis revenue, compared to the same period in 2014, but posted a net loss of $5.8 million, on revenue of $136.6 million, versus net income of $3.2 million on revenue of $144.2 million in the third quarter of 2014.
Overall revenue from Spartan’s Specialty Chassis and Vehicles unit totaled $40.3 million, compared to $29.5 million in the same period of 2014.
Spartan Chief Financial Officer Rick Sohm called the operating results disappointing in the release, noting the company made improvements in several categories, despite a financial setback.
“Third quarter 2015 results included non-cash asset impairment charges of $2.2 million, restructuring charges of $500,000 and $2.1 million in one-time warranty accruals,” he said in the news release. “Excluding the asset impairment and restructuring charges, the company’s adjusted operating income was $2.2 million.
“We also recorded a non-cash valuation allowance on our deferred tax assets of $3.2 million that is included in our income tax provision of $5.2 million for the quarter and is a major factor in our net loss of $5.8 million.”
Sohm expects the company’s specialty vehicle and delivery vehicle units to continue a positive trend in the fourth quarter of 2015, but added that he did not expect the emergency response division to fully recover in the quarter.
“We expect both DSV and SCV to be profitable in the fourth quarter but project operational challenges in ER to result in a consolidated operating loss for the fourth quarter of 2015, as well as the full year,” he said. “Our balance sheet at September 30 remained strong, with cash of $20.9 million.”
To view the full report, click here.