3SOF

Spartan Motors' profit up 30%: 2nd-quarter sales increase nearly 40%
Friday , July 27, 2007 08:08ET

Alejandro Bodipo-Memba

Spartan Motors Inc. said net income for the second quarter, Jul 27, 2007 (Detroit Free Press - McClatchy-Tribune Information Services via COMTEX) -- its best ever performance -- increased by more than 30% to $6.5 million, or 20 cents a share, compared with $4.9 million, or 17 cents a share, in the same period a year earlier.

The Charlotte-based designer and manufacturer of custom chassis and vehicles for the recreational vehicle, fire truck, ambulance, emergency-rescue and specialty vehicle markets, said sales for the 3-month period ended June 30 shot up nearly 40% to $152.6 million, compared with $109.2 million, in the second quarter of 2006.

All of the company's financial information includes adjustments for 3-for-2 stock splits issued in June 2007 and Dec. 2006.

"We remain on track for the best year in company history and see additional growth potential in the second half of 2007," John Sztykiel, president and chief executive officer of Spartan Motors, said in a statement.

"We have increased our production capacity at Spartan Motors by approximately 27% on a square-footage basis... "

Spartan Motors said its board of directors authorized a stock repurchase program of up to 1 million shares, or about 3% of its outstanding common stock.

The Spartan Motors board approved the buyback to allow the company to purchase common stock in open-market transactions over the next 12 months. Spartan Motors reported 32.95 million shares of common stock outstanding as of June 30.

Spartan stock closed at $13.15 on the Nasdaq stock exchange Thursday, down $1.06 for a loss of 7.46%.

latest news:
Spartan Chassis Begins Production at New Military Chassis Facilities
Wednesday, September 05, 2007 07:58ET

CHARLOTTE, Mich., Sept. 5 /PRNewswire-FirstCall/ -- Spartan Chassis, Inc., a subsidiary of Spartan Motors, Inc. (Nasdaq: SPAR), announced the opening today of two new manufacturing facilities near its headquarters in Charlotte, Mich., to meet increased demand from its military OEM customers.

Spartan spent $8 million earlier this year to purchase and renovate the buildings, which will be used primarily to supply and integrate key chassis components for Mine Resistant Ambush Protected (MRAP) vehicles. According to company estimates the increased demand and purchase of the new facilities, which total 80,000 square-feet, have resulted in approximately 100 new jobs at the company. Moving this work to the new facilities will also create additional capacity at Spartan's other facilities to allow for continued growth in its fire truck and motorhome chassis production lines.

"Since we purchased the new facilities back in April of this year, Spartan Chassis has continued to win orders at an impressive pace," said Richard Schalter, president of Spartan Chassis. "These new facilities will help provide us the additional capacity we need to meet the sustained demand we are seeing for our specialty chassis products, which includes more than $100 million worth of new contracts for MRAP vehicles in the past two months."

Over the past two months, Spartan Chassis has announced that it has secured military contracts from three major defense contractors including:

    --  $30 million subcontract order from Force Protection, Inc.
    --  $28 million subcontract order from General Dynamics Land Systems
    --  $53 million subcontract order from BAE Systems

The MRAP vehicles are designed to protect their occupants from a combination of mines, rocket-propelled grenades, or RPGs, and improvised explosive devices, or IEDs, through their V-shaped hull, raised chassis and improved armor. According to U.S. government reports, roadside bombs and IEDs account for 70 percent of U.S. deaths and injuries in Iraq.

"These facility additions will allow Spartan Chassis to operate more efficiently, with specialized production and focus at each facility," said John Sztykiel, president and CEO of Spartan Motors. "The opening of this new capacity allows us to continue our growth in all areas of production and gives us the room we need to continue to work towards our goal of becoming the premier manufacturer of specialty vehicles and chassis in North America."

latest chart (looks much better now  )

Spartan is looking to boost MRAP output to 20 vehicles a day next month, from eight to 10 per day now.

Custom vehicle builder Spartan Motors has a can-do culture

September 23, 2007
BY TOM WALSH
FREE PRESS COLUMNIST

If Michigan is doomed to watch helplessly as its once-robust manufacturing base shrivels away, someone forgot to send that memo to the folks at Spartan Motors Inc.
Spartan employs 1,100 people today, up from 550 only 20 months ago, in its hometown of Charlotte, 20 miles southwest of Lansing along I-69.

Its sales jumped 39% in the first half of this year to $295 million. Profits rose even faster to $13.7 million for the six months ended June 30, up 45% from the same period in 2006.
And Spartan's stock price has more than tripled, from $4.50 at the start of 2006 to its $16.49 closing price Friday. So what's the secret?

Spartan engineers and builds motor vehicles, as do many of Michigan's struggling and shrinking manufacturers. It makes gas-guzzling motor homes hurt by the high price of fuel. It serves erratic customers that submit rush orders for military vehicles, forcing Spartan's workers into occasional spurts of relentless overtime as plants run 12-hour shifts seven days a week.

So how does Spartan thrive while so much of Michigan's manufacturing industry struggles?

It's not about some unique proprietary product or whiz-bang new technology. Spartan's factories have virtually no automation. John Sztykiel, Spartan's president and CEO, says it's all about culture and the customer. All of Spartan's vehicles and chassis are custom-built for customers in the recreational vehicle, fire truck, ambulance and military vehicle markets.

"Our goal is to be easy to do business with, to be responsive and fast," Sztykiel told me during a recent visit to Spartan's cluster of manufacturing plants.

Internally, the culture is all no-frills informality, focused on flexibility and pay-for-performance.

None of Spartan's nondescript buildings -- named Plant 1, Plant 2 on through Plant 8 -- is an obvious headquarters. So I drove up to Plant 1, only to be told Sztykiel's office was in Plant 3 on the next street over. Neither he nor other top officers have preferred parking spaces.

Hourly production workers are paid a base wage of $14 to $16 per hour, and everyone is eligible for a quarterly bonus based on return on invested capital. For the last two years, the bonuses -- the same for every employee from Sztykiel to the engineers to assembly workers -- have ranged from $1,800 to $2,000 per quarter.

If vehicle production is meeting or exceeding targets, employees are scheduled on four 10-hour shifts, giving them frequent three-day weekends. "We really don't want people here on Friday if we're ahead of schedule on production," Sztykiel said.

All Spartan workers got a 3% base-pay raise this year and saw no increases in their health care cost. The company is big on health awareness programs, offering on-site physicals and health care screenings. And it has been an early adopter of health savings accounts, which provide workers with lump-sum payments for most health care needs and force the workers to make choices on things like using brand-name prescription drugs or generics.

Spartan executives say that worker turnover company wide -- there are also 400 workers at three other locations in South Dakota, South Carolina and Pennsylvania -- is only 5% per year.

"I used to think we were in the automotive business," Sztykiel said, but he has recently decided that Spartan is in the business of solving complex problems for its customers. "And we have a lot more confidence in the American worker to solve complex problems than other companies do," he added.

Bill Hamilton, president and cofounder of Techsmith Inc., another fast-growing Lansing-area firm, said Sztykiel's point is an important one.

"Spartan does so much added-value work, they have so much agility. They don't know in five years what their top-selling product is going to be," Hamilton said. In that way, Spartan is much like Techsmith, an Okemos-based computer software firm, which has grown from 13 people in 1999 to 160 today on the strength of its SnagIt screen capture product and later Camtasia Studio, a video recording tool.

In one sense, Spartan's big bold fire trucks and motor homes seem a world apart from Techsmith's software. But when viewed as companies that solve complex problems by listening to customers' needs and rapidly tweaking products to satisfy them, Spartan and Techsmith indeed have similarities.

Sztykiel said Spartan officials had no idea three or four years ago that they would be entering the military vehicle business. But a former Spartan supplier suggested to Force Protection Inc., a builder of Mine Resistant Ambush Protected armored vehicles (MRAPs) for the U.S. military, that Spartan could help boost production efficiency -- a critical need due to a surge in demand for such vehicles in Iraq.

Spartan did its first MRAP assembly in July 2005, attaching a Spartan chassis to a hull designed with extra underbody armor to protect soldiers from roadside bombs and land mines.

Specialty vehicles, mostly MRAPs, provided 31% of Spartan sales last quarter, up from 9% a year earlier. The company is looking to boost MRAP output to 20 vehicles a day next month, from eight to 10 per day now. A hundred new Spartan workers will be added by Oct. 20 to help meet demand, said Richard Schalter, president of the Spartan Chassis operating unit.

The timing couldn't be better. The Army has recently decided to ask for 10,000 MRAPs to counter the threat of roadside bombs in Iraq, U.S. Sen. Joe Biden, D-Del., said last week. That's nearly quadruple the Army's earlier request.

Sztykiel and Schalter are quick to concede that there's no guarantee that Spartan can keep up its recent growth pace.

After Spartan's price soared from $5 a share in April 2006 to nearly $25 by June of this year, traders pushed it back down to around $12 in August after second-quarter profits fell slightly short of Wall Street expectations.

Last week, Spartan's stock was back on the rise, suggesting that all is not lost for Michigan manufacturing, even if Sztykiel now prefers to call it complex problem solving.

(SPAR).......
SUBSIDIARY RECEIVES $49M SUBCONTRACT ORDER: Spartan Chassis, Inc., a subsidiary
of Spartan Motors, Inc. (SPAR) announced it has received a $49 million subcontract order
from General Dynamics Land Systems to supply and integrate key chassis components in the
production of advanced tactical vehicles under the Mine Resistant Ambush Protected, or MRAP,
program. The vehicles under this order will be utilized by multiple branches of the U.S. military.