Spartan Motors (SPAR) Tops Q4 EPS by 5c, Revenues Beat; Offers FY19 EPS/Revenue Mid-Point Below Consensus

Spartan Motors (NASDAQ: SPAR) reported Q4 EPS of $0.10, $0.05 better than the analyst estimate of $0.05. Revenue for the quarter came in at $233 million versus the consensus estimate of $217.9 million.

"Spartan generated strong top-line growth in 2018, driven by the performance of our FVS and SCV segments, despite second-half industry-wide headwinds that negatively impacted our profitability," said Daryl Adams, President and Chief Executive Officer. "I am proud of the solid efforts from our Spartan team as we worked to mitigate the impact of these headwinds, which resulted in a better than expected fourth quarter."

• Sales increased $51.9 million, or 28.7%, to $233.0 million from $181.1 million
• Net income declined $0.6 million, or 24.9%, to $1.8 million, or $0.05 per share, from $2.4 million, or $0.07 per share
• Adjusted EBITDA declined 28.1%, to $6.7 million, or 2.9% of sales, compared to $9.3 million, or 5.1% of sales
• Adjusted net income declined 10.9% to $3.4 million, or $0.10 per share, from $3.9 million, or $0.11 per share
• Acquired Strobes-R-Us, a regional Florida-based vehicle upfitter, expanding the Company's manufacturing footprint and addressable market in the southeastern United States
• To date, repurchased 191,000 shares at an average price of $7.55 per share, or $1.4 million in the aggregate, since adopting a 10b5-1 trading plan on December 17, 2018, pursuant to the Company's one million share repurchase authorization

GUIDANCE:

Spartan Motors sees FY2019 EPS of $0.57-$0.65, versus the consensus of $0.62. Spartan Motors sees FY2019 revenue of $865-905 million, versus the consensus of $902.44 million.

"The full-year performance of each of our business segments reflects the hard work and dedication of the entire team to overcome the industry-wide headwinds we faced in 2018," said Rick Sohm, Chief Financial Officer. "While we are aware a few of these industry challenges are expected to continue into 2019, we are optimistic about our ability to mitigate most of these challenges and improve the profitability of all three of our business segments. We remain encouraged by the strength of our backlog and the underlying business fundamentals. Liquidity at year-end was $114 million, which is sufficient to support our strategic growth initiatives and capital allocation strategy, including the recent share buy-back."

Outlook for full year 2019 is expected to be as follows:

• Revenue to be in the range of $865.0 to 905.0 million
• Net income of $19.5 - $22.6 million
• Adjusted EBITDA of $37.1 - $41.1 million
• Effective tax rate of approximately 23%
• Earnings per share of $0.56 - $0.64, assuming approximately 35.2 million shares outstanding
• Adjusted earnings per share of $0.57 - $0.65

Adams concluded, "Our long-term view of our business remains positive, which is reflected in our 2019 adjusted mid-point EPS guidance, a 27% increase over 2018. We have strong underlying momentum in all three of our segments that will drive our future performance, led by last mile delivery in FVS, market share gains in SCV, and growth in contract manufacturing and aftermarket parts. With the actions taken over the past year to improve our leadership team and strengthen our business fundamentals, we are encouraged in our ability to achieve improved operating results in the coming year. The entire Spartan team remains focused on executing our strategic plan to drive long-term growth and increased shareholder value."

For earnings history and earnings-related data on Spartan Motors (SPAR) click here.

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