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Spartan Motors, Inc. (SPAR) |
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CEOCFO Current
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This is a printer friendly page! Spartan
Motors – 27 years of steady growth, well positioned for the future in the RV and
Emergency Rescue markets Spartan Motors, Inc. (NASD: SPAR) designs, engineers
and manufactures custom chassis and vehicles for the recreational vehicle, fire truck,
ambulance and emergency-rescue markets. The company's brand names -- SpartanŽ, Crimson
FireŽ and Road RescueŽ -- are known in their market niches for quality, value, service
and being the first to market with innovative products. Spartan Motors employs more than
750 at facilities in Michigan, South Dakota, Alabama, Minnesota and South. The
Company builds custom platforms that serve as the foundation for a variety of heavy-duty
specialty vehicles, including premium motorhomes, fire trucks and ambulances.
Leading motorhome and fire truck original equipment manufacturers (OEMs) use Spartan
custom chassis as the foundation of their vehicles. Our fire apparatus (Crimson Fire) and
ambulances (Road Rescue) are used in municipalities throughout North America and the
world. According to Mr. John Sztykiel, President and
CEO of Spartan Motors, Inc., “where we really differentiate
ourselves, is in the performance of the product and the after-sales support as a company.
Over 10% of our workforce of approximately a total workforce of 750 people, are involved
in engineering. Since our inception 27 years ago, we have been noted for innovative
vehicle performance. The other differentiating part of us as a company, is the after-sales
support; we are known as a relationship company; for example I spend a significant amount
of time each week meeting with individual end-users of our product, whether it be an RV
owner or an emergency rescue fire department, ambulance operator. It is the innovation
from a technology perspective, driven through a highly engineering company, and a
relationship orientation driven which delivers our results.” Spartan
works hard at getting its emergency rescue products seen. “Ironically
enough, in the U.S., very few, of the emergency rescue products really wear out unless it
is a very large city,” comments Mr. Sztykiel. “The reason we have so many
demonstrators and the reason we go to so many shows is people look at our product and say
to themselves, “Boy! There are a lot of features there, where I can really see the
benefits.” The product they have may be eight or fifteen years old, and they think
about upgrading their body to a SpartanŽ, Crimson FireŽ or Road RescueŽ product. By
spending a lot of time on the road with the product one-on-one with the consumer, we are
able to illustrate just how much the product has changed over the years. We work hard to
encourage the customer to analyze what their current product make-up is and then decide if
it is right for them to purchase something else.” Asked about the challenges
in meeting Spartan’s objective to become the most desired brand and the total
low-cost producer, Mr. Sztykiel explains, “For the most desired brand, the biggest challenge there is from a
marketing/information format; we have a very strong direct sales force. From a
marketing/advertising perspective over the last four or five years, we have not been that
strong; our website has been inadequate, or brochures have been inadequate as well as
mailings. As a company, we need to overcome those challenges but also be able to measure
the success. We need to ask ourselves if the Spartan name is becoming the dominant name
within the RV or emergency rescue business. From the lowest cost producer perspective, our
biggest challenge there is to develop the right people whether it be at SpartanŽ Chassis,
Road RescueŽ, or Crimson FireŽ, to ensure a consistent focus on reducing the waste and
how we operate whether it is in the office or in the shop. In the end, it revolves around
the fact that great people make great things happen.” Describing the RV
side of Spartan, Mr. Sztykiel comments, “While
it is an RV market, the execution is very similar to that of fire trucks, with innovation
through performance, very personable, and strong after-sale support. In the RV arena,
people typically researched their purchasing decision, about twelve to eighteen months.
When they are going through the research, when they see something they like, then they
make the decision to purchase. In the RV arena, it is really no different than emergency
rescue and people spend a lot of time researching the correct decision and when they see
something they like, they make a quick decision to purchase. For example, 52% of all RV
customers pay cash for their motor home, which is a high percentage. Less than 2% of all
RV loans ever go delinquent. It is a very conservative, impulse oriented business, but
they do a lot of research prior to the buying decision.” Addressing
potential investors, Mr. Sztykiel states, “The first thing that people need to look at is the growth
opportunity. In our two core markets of RV and emergency rescue, we
only have 5% market share and that is in the U.S., which means we have a tremendous amount
of opportunity to grow. When they look at our financial performance over the last
seventeen years, and our balance sheet and debt-free structure, what that indicates is
that as a company, we have been able to work through some very difficult economic
situations, yet grow and prosper; 2001 and 2002 are no different. As I look at investment,
I try to look at the soundness of the management team and whether their growth is in the
future or are they into a mature market. As investors look at us, they see a tremendous
amount of room for growth, and they see very sound financial management.” |
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