CHARLOTTE — Specialty vehicle manufacturer and assembler Spartan Motors Inc. expects full-year sales to approach the $1 billion milestone this year.
Spartan Motors (Nasdaq: SPAR) today raised its guidance for 2019, saying it forecasts $990 million to $1 billion in revenue and net income of $27.3 million to $28.8 million. The improved outlook comes as the result of Charlotte-based Spartan Motors’ recent acquisitions, higher order backlogs, improved productivity and low-cost country sourcing initiatives, according to CFO Rick Sohm.
“We are excited about our results so far this year and the opportunity to close the year out strong,” President and CEO Daryl Adams said in a statement. “We believe we are laying the foundation to drive long-term profitable growth for Spartan and its shareholders.”
For the third quarter that ended Sept. 30, Spartan Motors generated $288.9 million in sales, up 27.8 percent from a year ago. The company also reported net income of $10.4 million, or 29 cents per share, nearly double from the same period in 2018.
The company’s operating results were driven by its Fleet Vehicles and Services business, its largest unit which accounted for more than $179 million in revenue for the quarter. Spartan expects the business unit to continue to drive sales given its backlog of $223.8 million in orders, an increase of 93 percent compared to a year ago.
Spartan Motors anticipates it will take six months or less to deliver the backlog of orders.
“The continued demand for delivery vehicles in all of our vehicle classes is driving our growth,” Adams stated.
Earlier this year, Spartan Motors boosted its capabilities in the Fleet Vehicles and Services business with the acquisition of California-based General Truck Body Inc., as MiBiz previously reported. The manufacturer followed up that deal with the third quarter acquisition of Carson, Calif.-based Royal Truck Body, which now operates as part of Spartan’s Specialty Chassis and Vehicles unit.
Adams said the company’s organic growth and acquisitions, which have added eight manufacturing plants in the last 10 months, are helping it execute on its strategy “to offer coast-to-coast manufacturing and distribution capabilities.”
“We expect to see continued year-over-year profitability growth into the fourth quarter of 2019, driven primarily by delivery vehicle orders in all vehicle classes and continued margin expansion,” stated Sohm, who in September announced his plans to retire from the company upon the hiring of his successor.
Spartan has hired a national search firm to identify a replacement for Sohm, who has served as CFO since September 2015.