Spartan’s Utilimaster subsidiary is currently addressing fit-and-finish quality and appearance issues on approximately 170 vehicles. The Company expects to ship the majority of these vehicles to customers or dealers during July and August. For the second quarter of 2012, Spartan does not expect to ship Reach vehicles to customers as the Company addresses the fit-and-finish issues. Spartan expects full-year 2012 shipments of 500 to 1,000 Reach vehicles.
Spartan Receives Order for 150 More Reach Vans from Major Fleet Customer
Spartan announced its Utilimaster subsidiary has received a new order for an additional 150 Reach vehicles from one of the world’s largest delivery service companies. Our customer evaluated the performance of the Reach for a year under a variety of climatic and operating conditions. The Reach offers several advantages over a traditional walk-in van, including greater maneuverability, improved ingress and egress, nearly 1,000 lbs. lower weight and significantly lower fuel consumption through the use of advanced, lightweight composites/recycled materials, all combined with great looks. These units will be delivered during the second half of 2012.
Spartan’s Chief Executive Officer,
New Reach Production Location and Leadership
Spartan is currently transferring production of the Reach from Utilimaster’s
Spartan has also selected
Production Ramp Up Slows in 2012
Mr. Sztykiel commented on the Reach ramp-up, stating, “The launch of the Reach has been a more difficult and time-consuming process than we would have preferred. Encountering a few delays and cost issues requiring resolution is not surprising since the Reach is an all-new, transformational delivery vehicle utilizing advanced composite materials and new manufacturing processes. As is often the case with game-changing new products, we have encountered some challenges to overcome as we bring the Reach into the marketplace and believe it is appropriate to slow the production ramp-up. But all problems have identifiable solutions. Those solutions are being put into effect now and the customer’s delivery requirements will be met. We are focused on ensuring we have a great-looking, performance-oriented product to drive growth in sales in 2013 and beyond.”
2012 Financial Expectations Unchanged
Despite Reach challenges, the Company reaffirmed its previously disclosed expectations for 2012 financial performance. Management has previously stated it expects full-year 2012 revenue growth in mid-single digits over 2011 levels, with a gross margin in the 15 – 15.5% range and operating expenses of 12 – 12.5% of revenue. Both the gross margin and operating expense expectations are from continuing operations, excluding restructuring or expenses from Utilimaster’s relocation to
Management expects to provide further details on the production ramp of the Reach in its Second Quarter 2012 earnings release and conference call, scheduled to be held in early August.
This release contains several forward-looking statements that are not historical facts, including statements concerning our business, strategic position, financial strength, future plans, objectives, and the performance of our products. These statements can be identified by words such as “believe,” “expect,” “intend,” “potential,” “future,” “may,” “will,” “should,” and similar expressions regarding future expectations. These forward-looking statements involve various known and unknown risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, and likelihood. Therefore, actual performance and results may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could contribute to these differences include operational and other complications that may arise affecting the implementation of our plans and business objectives; continued pressures caused by economic conditions and the pace and extent of the economic recovery; challenges that may arise in connection with the integration of new businesses or assets we acquire or the disposition of assets; issues unique to government contracting, such as competitive bidding processes, qualification requirements, and delays or changes in funding; disruptions within our dealer network; changes in our relationships with major customers, suppliers, or other business partners, including
Media: Russell Chick, Director of Marketing, Spartan Motors, Inc., +1-517-543-6400, or Analysts: Greg Salchow, Director IR & Treasury, Spartan Motors, Inc., +1-517-543-6400