Spartan Motors Provides Update on Reach Launch
Spartan Motors (NASDAQ: SPAR) updated on Monday the product launch status of its revolutionary Reach delivery vehicle. Demand with major fleets continues to be positive, as one of the world's largest parcel delivery companies announced an order for 150 new vehicles. The move of Reach manufacturing to the Charlotte, Michigan, campus is underway and on track to be completed in the third quarter of this year.
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.
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 Bristol, Indiana. For the year, Spartan expects to deliver approximately 500 – 1,000 Reach vehicles. For 2013, the Company expects production of the Reach to be approximately double the number of 2012 shipments.
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.
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