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Edited Transcript of SPAR earnings conference call or presentation 1-Aug-19 2:00pm GMT

Q2 2019 Spartan Motors Inc Earnings Call

CHARLOTTE Sep 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Spartan Motors Inc earnings conference call or presentation Thursday, August 1, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daryl M. Adams

Spartan Motors, Inc. - CEO & Director

* Frederick J. Sohm

Spartan Motors, Inc. - CFO & Treasurer

* Juris Pagrabs

Spartan Motors, Inc. - Director of IR & Group Treasurer

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Conference Call Participants

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* Justin Lars Clare

Roth Capital Partners, LLC, Research Division - Director & Research Analyst

* Stephen Michael O'Hara

Sidoti & Company, LLC - Research Analyst

* Steven Lee Dyer

Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst

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Presentation

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Operator [1]

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Good morning, and welcome to Spartan Motors 2019 Second Quarter Conference Call. (Operator Instructions) This call is being recorded at the request of Spartan Motors. If anyone has objections, you may disconnect at this time. I would now like to introduce Juris Pagrabs, Group Treasurer and Director of Investor Relations for Spartan Motors. Mr. Pagrabs, you may proceed.

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Juris Pagrabs, Spartan Motors, Inc. - Director of IR & Group Treasurer [2]

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Thank you, Danielle. Good morning, everyone, and welcome to the Spartan Motors 2019 Second Quarter Earnings Call. I'm Juris Pagrabs, and joining me on the call today are Daryl Adams, our President and Chief Executive Officer; and Rick Sohm, our Chief Financial Officer.

For today's call, we've included a presentation deck, which will be filed with the SEC and is also available on our website at spartanmotors.com. You may download the deck from the Investor Relations section of our website to follow along with our presentation during the call.

Before we start today's call, please turn to Slide 2 of the presentation for our safe harbor statement. You should be aware that certain statements made during today's conference call, which may include management's current outlook, viewpoint, predictions and projections regarding Spartan Motors and its operations may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995.

I caution you that as with any prediction or projection, there are a number of factors that cause Spartan's actual results to differ materially from projections. All known risks that management believes could materially affect the results are identified in our Forms 10-K and 10-Q filed with the SEC. However, there may be other risks that we cannot anticipate. On the call today, we will provide an overview of the second quarter, along with a brief business update, followed by a more detailed review of the second quarter results and an update on our outlook for the remainder of the year before proceeding to the question-and-answer portion of the call.

At this time, I'm pleased to turn the call over to Daryl for his opening remarks, which begin on Slide 3.

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [3]

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Thank you, Juris. Good morning, everyone, and thank you for joining us on our second quarter conference call. Before we start, you may recall, in June, we brought on a new COO, Todd Heavin. Todd a proven multi-site operations and lean manufacturing leader with significant Tier 1 automotive supplier experience and brings his global and domestic operation leadership to the Spartan team.

In short, in the short time that Todd's been here, his emphasis on operational metrics alongside the implementation of the lean manufacturing continuous improvement principles of the Spartan production system is refreshing.

We look forward to Todd's contributions and welcome him to the management team. I want to start by saying how pleased I am with the team's hard work in Q2. We have laid the foundation for improved performance over the past several years, and those efforts are yielding strong results as our business gains momentum. Revenues for the second quarter rose 35% to $248 million from $184 million a year ago. The strong growth at FVS continued in the second quarter as sales were up 80%, driven by the USPS truck body order in Ephrata, Pennsylvania and higher last mile delivery vehicle demand. The strength in FVS is poised to continue in the second half of the year due to accelerating demand.

ER has posted solid growth, up 15% to $68 million as the segment benefited from increased deliveries and pricing actions.

SCV sales reflects higher contract manufacturing, including Reach production partially offset by softer luxury motor coach chassis sales.

Now please turn to Slide 4, and I'll provide an update on a few business highlights and exciting new developments, starting with FVS. Broad customer demand across our entire vehicle class spectrum continues to be a driving force and are propelling the growth of FVS. While we are pleased with the growing momentum of the FVS business, we continue to invest in new products and technologies that will drive future growth in that segment. In May, FVS reintroduced the Utilivan, a highly customizable commercial truck body designed to meet the rigors of varied demands of commercial product and service delivery. In June, we introduced several new innovations for linen and laundry service providers at the Clean Show in New Orleans. This is the latest example of our work-driven design approach that enhances safety, efficiency and productivity for our fleet customers.

Please turn to Slide 5 for an update on our recent acquisition. As we look at future growth and new business opportunities, we are focused on meeting customer demand. Following the recent expansion of our East Coast production facilities, in June, we announced the acquisition of General Truck Body. The purchase immediately expands our truck body manufacturing operations into Southern California. This addition, combined with the existing FVS facilities, provides coast-to-coast production and distribution capabilities for our fleet and commercial truck body customers.

Please turn to Slide 6, I will discuss a significant development for the ER business. In keeping with the objective of optimizing operations and enhancing efficiencies to drive consistent profitable growth, last month, we announced the launch of Detroit Truck Manufacturing. This new operation will serve as a vertically integrated supplier of fabricated aluminum cabs for the ER business. We expect this initiative to provide improved cost, flexibility and quality, while mitigating potential risk in our broader supply chain.

The facility is located in Southeast Michigan, a short drive from Charlotte and has the capacity to fabricate our current needs.

Please turn to Slide 7, and I'll continue with Specialty Chassis and Vehicles segments. Despite SCV's revenues being down 12% year-over-year, reflecting lower luxury motor coach sales as a result of dealer adjusted inventory levels, we saw our EBITDA margin grow 300 basis points to over 12% during the quarter.

The margin expansion was driven by favorable mix and increased manufacturing throughput from contract manufacturing, including the Reach vehicle. To further diversify our revenue base in SCV segment, SCV entered into an exclusive U.S.-based assembly agreement with Grande West Transportation Group, to assemble their Vicinity, a mid-sized bus. This agreement leverages SCV's U.S.-based contract manufacturing and opens a new addressable market for the segment.

With that, I will turn the call over to Rick to discuss Spartan's financial results for the second quarter as well our revised outlook for the remainder of 2019.

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [4]

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Thank you, Daryl. I'll turn to Page 9. Our Q2 results highlight growing demand for last mile delivery and our continued effort to drive profitability across our company. We expect revenue and profit growth to accelerate in the second half of 2019 driven primarily by last mile delivery demand, which allows us to raise our full year outlook. Q2 adjusted EBITDA grew 7% to $9.5 million from $8.9 million a year ago.

Adjusted EBITDA margin declined to 3.8% from 4.8% a year ago due to the USPS truck body order and an unfavorable mix due to a nonrecurring upfit order, higher material costs and approximately $0.7 million of upfit ramp-up costs.

Adjusted net income grew 19% to $5.1 million from $4.3 million a year ago, while adjusted EPS grew to $0.15 per share from $0.12 per share in the prior year. Additionally, Q2 operating results include $0.8 million or $0.02 per share of start-up costs relating to DTM compared to $0.3 million or $0.01 a share a year ago. Our backlog at quarter end, excluding the onetime multiyear truck body order, grew to $465.8 million, up 46% from $319.8 million in the prior year.

Now we'll look at each operating segment -- with fleet on Page 10. Fleet reported revenue of $141.1 million compared to $78.4 million a year ago, for a growth of 80%. The higher revenue reflects $36 million of pass-through revenue from the truck body order and growing last mile delivery demand compared to $8 million of pass-through revenue a year ago.

Adjusted EBITDA declined $0.5 million to $7.9 million from $8.4 million a year ago largely due to unfavorable mix. Adjusted EBITDA margin declined to 5.6% from 10.7% a year ago due to unfavorable mix relating to a 2018 upfit order that did not reoccur and pass-through revenue that was up significantly in 2019. There were start-up costs of $0.7 million for all 3 upfit centers and beginning to relocate truck body to Charlotte, Michigan from Bristol, Indiana.

Excluding the above, Q2 '19 normalized adjusted EBITDA margin was 7.5% compared to 6.3% a year ago. Excluding the onetime multiyear truck body order, fleet backlog grew $135 million or 123% to $244 million compared to $109 million a year ago.

Moving to Page 11 and ER. Second quarter 2019 revenue grew 15% to $68.3 million, up from $59.6 million a year ago. The growth was due to increased volume and improved pricing. Adjusted EBITDA in Q2 improved $0.9 million to a profit of $1.1 million from $0.2 million in the prior year. The improvement was primarily the result of pricing, volume and mix and certain acquisition-related adjustments, partially offset by higher supplier material costs.

Our ER backlog grew $14.1 million or 8% to $190 million compared to $176 million in the prior year.

Moving to Page 12 and SCV. Revenue was down 12% to $41.7 million from $47.5 million primarily due to an $8.5 million decline in luxury motor coach volume, driven by weaker demand in our segment of the RV market. Despite the decline in revenue, adjusted EBITDA grew 16% to $5.1 million from $4.4 million a year ago driven by favorable mix and higher manufacturing throughput.

Adjusted EBITDA margin grew 33% to 12.2% from 9.2% a year ago.

Backlog at the end of Q2 grew 11% sequentially to $32 million from $29 million at Q2 -- Q1 2019.

Turning to our balance sheet on Page 13. Our overall financial profile will provide ample flexibility to meet all our long-term growth requirements. During the quarter, we paid down $5 million on our revolver and our total liquidity at the end of the quarter was $101 million, reflecting $18 million in cash and $83 million of borrowing capacity.

On Page 14, I'll review our outlook for the remainder of 2019. With the strength of our backlog and momentum in key markets, while taking into account additional launch costs to meet higher last mile delivery demand, we are updating our outlook with the following: revenue midpoint up 10% to a range of $960 million to $990 million; net income up 20% at the midpoint to a range of $24.1 million to $26.4 million; adjusted EBITDA midpoint up 14% to a range of $43.3 million to $46.2 million; EPS midpoint up 20% to a range of $0.68 to $0.75 a share, assuming 35.3 million shares outstanding; adjusted EPS midpoint, up 21% to a range of $0.70 to $0.77 per share.

I'd now like to turn the call back over to Daryl.

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [5]

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Thanks, Rick. Please turn to Slide 15. For the strong performance in the first half of 2019 positions us well to capture additional growth in the long term, increasing broad customer demand across our entire product portfolio and improving backlogs are expected to drive second half revenues and profitability growth. The Spartan team remains focused on executing our overall strategic plan, and we'll continue to invest in new products, innovation and manufacturing footprint to expand our leadership position in the markets we serve. Through the efforts of our entire Spartan team, we will continue to drive results that will ultimately benefit our employees, customers and shareholders.

Operator, we're ready to take questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Justin Clare of Roth Capital Partners.

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Justin Lars Clare, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [2]

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So I guess -- I first wanted to start off with guidance. So your updated 2019 guidance for revenue and adjusted EBITDA suggests that you anticipate improving EBITDA margins in the back half?

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [3]

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Correct.

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Justin Lars Clare, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [4]

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Just wondering if you could -- could you comment on where you expect to see improvements in terms of which segments? And then just how you anticipate the margins evolving in each segment as we move through the year.

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [5]

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Yes. Justin, I think a big driver is this last mile delivery demand. So I would expect that the majority of the improvement in the second half will come from fleet. If I look at their current margin, it will improve significantly in the third and fourth quarter. If I look at ER, I would expect some improvement there in the margin. And with Specialty, I think they were at 12.2% in Q2, I think I would expect that to be kind of a high watermark in Q2. And we would see Q3 and Q4 more in line with where they were earlier in the year.

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Justin Lars Clare, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [6]

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Great. Okay. Great. That's very helpful. And then -- so last month, you announced a meaningful order with a leading e-commerce customer that you're working with. It included a minimum volume for walk-in vans to be delivered in the back half. So I know it's still early, but could you comment on the potential to supply more than the minimum? What kind of capacity do you have to do that? And then what demand are you seeing? And then is any upside included in the guidance range that you provided today for your revenue?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [7]

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Yes. This is Daryl, I'll take this one. We're seeing, as I said, broad demand at the FVS group through all of our vehicle segments, 1 through 7, that was one order, right, that we talked about only because it was material and we needed to let everyone know. But behind that, we still get multiple orders from our traditional customers and some new ones. But I've talked about it before, the e-commerce demand and the closing of brick-and-mortar stores is driving demand, again, through all of our segments and through all of the traditional last mile delivery customers. So we don't know, right, how many orders we're going to continue to get.

But all I can tell you is, if you read the economics, right, you understand the brick-and-mortar stores are closing and e-commerce growth, it's bound to -- it's continue to grow and that's what was exciting to us. We -- you also asked about capacity. So we have added some capacity. Last year, 3 plants on the East Coast. We have capacity we've added in the West Coast now. We do have some flexibility here in Charlotte with the Reach build ending. We are moving some truck body out of Bristol into Charlotte. We're moving Bristol truck bodies into Pennsylvania. And we're having good feedback from our truck body customers on the acquisition of General Truck Body out in California. So the capacity will not be an issue. We have that. And if you remember, a majority of our plants are on one shift. Some of them are a little bit into a second. So we can also ramp up multiple shifts, if we need to.

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Justin Lars Clare, Roth Capital Partners, LLC, Research Division - Director & Research Analyst [8]

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Okay. That's very helpful. And then one final question for me. There's been some improvement in commodity pricing recently. But at the same time, we got another increase in tariffs with the List 3 tariffs being moved to 25% from 10%. I was wondering if you could just comment on, generally how these 2 different factors are affecting your cost structure. And whether you're able to mitigate any of the effect of the increase in tariffs?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [9]

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Yes, I'll take it again, Justin. If we go back to previous calls that we had, we've put in actions to mitigate what we could see at the time. We've taken -- we've resourced products that would have caused us some heartburn in the second half of last year due to the tariffs into different regions of the world, some back into the U.S., like others did. So right now, we're comfortable with where we're at on the tariffs, we don't see any impact at this point into the numbers that we're presenting. Now again, if something happens with additional tariffs that we don't know about, that will be something that we'll have to take into account and understand it. But the ones that we know of, we've taken actions and we feel comfortable with the guidance we've given.

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Operator [10]

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The next question comes from Steve Dyer of Craig-Hallum.

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Steven Lee Dyer, Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst [11]

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Congratulations on the results. I guess just a couple of things. First, with FVS, do -- the order that you announced here subsequent to the end of the quarter, is that included in your FVS backlog? Or is that above and beyond as of 6/30?

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [12]

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We would have that in our backlog at the end of the quarter. Correct.

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Steven Lee Dyer, Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst [13]

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Okay. So it was just a couple of week delay in announcing it, basically.

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [14]

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Yes.

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Steven Lee Dyer, Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst [15]

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Okay. Okay. Just looking at the Ephrata facility. I guess as you're working your way through the USPS order, are you able to share sort of are you -- how is it going in terms of procuring more business from them? Or how are you feeling about sort of finding things from other customers in a way that sort of keeps that plant running at a similar level next year and in the future?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [16]

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Yes. Steve, this is Daryl. I'll answer that for you. So we -- I think we mentioned last quarter that we are seeing orders coming in from one of our larger fleet customers that we typically would have. They like the location, we're seeing some momentum on the local dealers asking for trucks. That was part of the announcement with the Utilivan that we launched, that was their request, in addition to regular truck bodies. So we're seeing good momentum and we're starting to see good dialogue too amongst some of our fleet customers that with all 3 locations now -- I think we've talked before, one of our customers would only give us 1/3 of the order because we could handle the Midwest. Now we're starting to hear dialogue about the complete order, which we've talked about in the past, we couldn't get, now we're going to get it because of the California location, Ephrata location and then Bristol or Michigan, wherever we're building truck bodies. So we're seeing a nice backlog at the Ephrata plant when this ramps down at the end of Q3.

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Steven Lee Dyer, Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst [17]

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Got it. That's very helpful. I guess sort of broadening out as some of the Class 8 guys and dry van guys have reported, they've talked -- it seems a little bit of a slowing expected in that industry, Q4 -- Q3, Q4, into next year and so forth, just with the economy. I suspect what you're seeing in final mile sort of bucks that trend pretty significantly. But I guess beyond this year, what are you seeing there? Or what do your conversations suggest just in terms of how cyclical is this space? Or how might it be not cyclical at all?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [18]

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Yes. Again, Steve, I talk about the growth in e-commerce, you can Google it, right? And it's just -- it's a double-digit multiple and the brick-and-mortar stores closing, we continue to talk about that, it's in the press. I don't know what the slope of that curve is in the -- in next year or the year after, but I don't see how it's going to slow down. And with -- it may slow down other with Class 8, but we're in a well positioned with our Class 1 through 7 to fulfill the needs. And I think we've talked before, multiple customers are coming to us, we've expanded into I think 6 or 7 now that are buying the EuroVans, Class 2, moving into walk-in vans and then also moving into truck bodies. And then we're picking up parts and service with them and field service. So as these trucks continue to put miles on, with our 1 through 7, we feel we're positioned. We're actually looking at some business in Class 1 now. It would be into the smaller EuroVans that are coming in and that's exciting. And I think it just goes to show that the strategy we put in place a few years ago to move down the segments and fulfill one-stop shop for our customers is starting to take hold.

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Steven Lee Dyer, Craig-Hallum Capital Group LLC, Research Division - Co-President & Senior Research Analyst [19]

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Got it. Okay. And one last one for me and I'll hop back in the queue. Just in terms of specialty chassis, not an area a lot of people talk about much. But what are you hearing sort of from your luxury motor coach customers, just for expectations in the second half of the year and maybe early visibility into next year? Just around that cycle.

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [20]

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Yes. That's a difficult question. We continue to probe there. As you can imagine, trying to figure out as well. At this point, we don't have any solid direction or guidance. We're monitoring it as close as we can. The team is meeting with them. And again, they're trying to understand why there's some changes they're making quick to the vehicle side in order to bring us new customers. But we're -- again, with the technologies we're putting in, moving down in the less than 400 horsepower, are some of the things that are helping us buck a little bit of the trend. But when we -- hopefully, next quarter, we'll have some additional opinions on it. But right now, we don't have anything solid that we can share.

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Operator [21]

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The next question comes from Steve O'Hara of Sidoti & Company.

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Stephen Michael O'Hara, Sidoti & Company, LLC - Research Analyst [22]

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Just in terms of the acquisition profile or the acquisitions that you made so far. I think I heard you say that you're kind of coast-to-coast in terms of your build-out on that -- within that business. Is that the case? Or is there more to come in terms of being able to source customers throughout the country, if, let's say, Frito-Lay needs trucks on the West Coast or something like that or the South. Are you guys fully built out on that yet? Or where does that stand?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [23]

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Yes. Good question, Steve. Maybe we could have added some more clarity to it. So right now -- so before 2018, before Ephrata, we were isolated just to the Midwest because each of these vehicles do take a driver and the cost to get to the East and West Coast, obviously, deteriorates our margins and doesn't make us competitive. Now with that said, because we're in Ephrata that doesn't mean we can fulfill the needs all the way up and down the coast, but the majority of the population is up in the Northeast and that's why we went there first. Some of the data tells us that 15% of the entire truck body market is sold in 2 states, which is Pennsylvania and New York. And then on the West Coast, right, we're in Southern California, which is the most populated area.

So we feel we're pretty good on the Northeast and the Southern California. Our strategy, as we've talked about before, is eventually -- so we're not built out yet. Eventually, with the location in North Charleston, South Carolina, the plant is large enough to start building truck bodies there. Once we get the ramp-up completed with the EuroVans from the Sprinter, we'll be focused on that. And then we're actually looking for some space in -- north of Pompano Beach, probably the mid-Florida to -- for some more property to put a facility up there. Once we get that capacity, we'll have space in that facility, also to build truck bodies. So it's probably -- we can handle most of the customers. But from the fleet side, on the commercial side, the build-out over the next probably 18 months is going to help us with that growth. And that's why we see the momentum growing, is that we're following our strategy, we're disciplined, we're sticking with it and we're seeing the growth in Class 1 through 7.

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Stephen Michael O'Hara, Sidoti & Company, LLC - Research Analyst [24]

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Okay. That's helpful. And then I guess on the other thing. I mean I can't recall off the top of my head, but I recall you guys talking about kind of long-term goals for 2020. And I think it was something in the neighborhood of $1 billion in revenue and 10% EBITDA margins. It seems like you're getting close there in terms of the revenue side. And I think you had caveated that in the past, given some of the tariff issues about needing acquisitions. I guess so you're almost there on the revenue side, what needs to happen to kind of help close the gap? And you made it -- it seems like this year is going to be significant progress over last year. But what pieces remain in terms of getting there, not necessarily by 2020, but getting there eventually?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [25]

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Yes. No, we didn't come down on our number, we just delayed it. We have not put a time frame on that. So it is still in our sights, you're correct. We'll see the revenue side sooner because of the tariffs. And again, for us to put a target out there, we need to get some stability in the tariff market, both with -- NAFTA that's not approved yet, which is USMCA, still hanging out there. And then the activity with the tariffs into China. So to put a time frame on it is, it wouldn't be fair for me to do that to the team or to the shareholders. But it is still a goal. We see it and then, especially with Todd Heavin on board, we see some positive momentum on the operational improvement side. So we're going to attack on all fronts and make that our goal.

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Stephen Michael O'Hara, Sidoti & Company, LLC - Research Analyst [26]

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Okay. And just I mean without putting a time line on it in terms of the business profile that you have now, the customers that you have now, is it -- is getting the margins up, maybe something that's more doable now than it was maybe 6 months ago or a year ago or how -- do you feel more confident that -- it seems like you're on the right track in terms of that process and will continue to kind of March forward?

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [27]

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Yes, we feel comfortable. We're just going to march forward. Most of that was internal costs, right? And some of our orders, if you recall, it's pretty tough to go back in municipalities and increase prices on a contract that's been sourced. So we have to let some of that run through. We talked about that in previous calls. ER should be clean, I think, Q3, sometime, Rick? Or...

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [28]

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Late Q4 probably.

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Daryl M. Adams, Spartan Motors, Inc. - CEO & Director [29]

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Okay. So there is some drag on effect, Steve, that we see cleaning up maybe late this year and into next year. And that's as long as there are no more tariffs. So we're okay on a customer and pricing side, it's more of the material and operational side that we think we're going to make positive inroads on.

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Frederick J. Sohm, Spartan Motors, Inc. - CFO & Treasurer [30]

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And one other thing. I thought in our push to 10%, we had assumed that we could go overseas or into Mexico and explore opportunities there. So not only did we -- not get any savings domestically but last year made going overseas impossible.

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Operator [31]

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This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Pagrabs for closing remarks.

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Juris Pagrabs, Spartan Motors, Inc. - Director of IR & Group Treasurer [32]

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Thank you, Danielle. Thanks, everyone, for joining us this morning. We'll be at a couple of conferences coming up in August, Jefferies next week and Seaport at the end of the month. We look forward to keeping you updated on our progress for the rest of the year. And I think our next earnings call will be scheduled end of October, early November. So thanks again and have a great day.

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Operator [33]

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.