transforming the world through specialty vehicles Slide 1 · 2010. 3. 1. · Slide 3 SMI Vision,...
Transcript of transforming the world through specialty vehicles Slide 1 · 2010. 3. 1. · Slide 3 SMI Vision,...
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Slide 1
transforming the world through specialty vehicles
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Slide 2
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Slide 3
SMI Vision,Organizations Must Evolve
SMI vision: “Transforming the world through specialty vehicles”
– Society is becoming more customer centric and lean, demanding
specific solutions that are tailored to individual wants and needs at
a desired price
– As society evolves, markets and product will evolve, and vehicles
and services will become more “customer centric" and “value
oriented”
– As we evolve and become the leader in each niche, the total vehicle
market transforms from “commercial” to “specialty,” one niche at a
time
Organizations must evolve:
– Of the S&P 500 in 1957 (a big year for baby-boomer births), by 1998 only 74 still
existed (15%) – of these, only 12 gained in position (2.5%)
– Less than 1/3 of companies in the S&P 500 survive 25 years
– Spartan Motors has been in business for 35 years, since 1975
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Slide 4
Opportunity…58+ VehicleMarkets in North America
MARKETS MARKETS MARKETS
1 4-Wheel Drive 21 Handicap Access Taxi 41 Refrigerated Vehicles
2 Agriculture / Farm 22 Hazardous Materials 42 Refuse
3 Ambulance 23 Home Delivery Food 43 Restaurants
4 Beverage Processing & Distribution24 Homeland Security 44 Retail / Wholesale
5 Business Professionals 25 Inter-City Delivery 45 Road Service / Highw ay Maintenance
6 Commercial Survivable Vehicles 26 Intra-City Delivery 46 Sales
7 Commercial transportation 27 Landscaping / Horticulture 47 Sanitation
8 Construction 28 Law n Care 48 School Bus
9 Contractor 29 Manufacturing 49 Shuttle Service
10 Defense 30 Medical Taxi 50 Skilled Trades
11 Delivery 31 Mining / Quarry 51 Specialized Heavy Hauling
12 Drilling Services 32 Moving & Storage 52 Step Van
13 Dry Freight 33 Outdoor Recreaction 53 Taxi
14 Fire and Rescue 34 Paratransit 54 Tow & Recovery
15 Florist 35 Petroleum 55 Truck Body
16 Food Processing & Distribution 36 Police Vehicle 56 Utility & Utility Services
17 Forestry & Lumber 37 Private Limo Transportation 57 Vehicle Recovery
18 General Freight 38 Public Bus Transportation 58 Vehicle Transporter
19 Glass Transporting Equipment 39 Public Works
20 Government / Municipal 40 Recreational Vehicles
KEY - Yellow - Attain INFO
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Slide 5
Markets Served
Fire Trucks
Aerials
Fire Truck Chassis
Aerial Chassis
AmbulancesNEAT
MRAP
Class A MHChassis
Coach Ready Platforms
APA
Mobile Drilling Platforms
Step Van
Ambulance Chassis
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Slide 6
Financial Update
$681.9
$445.4
$343.0$312.3
$844.4
$429.9
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2004 2005 2006 2007 2008 2009
$11.8
$42.7
$24.5
$16.8
$8.3$5.9
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2004 2005 2006* 2007 2008 2009
* Included a non-cash cash write-off of goodwill ($2.1m)
Net Sales
(millions)
Net Earnings
(millions)
$247.6
$169.9
$338.4
$232.1
$167.8
$117.6
$0
$50
$100
$150
$200
$250
$300
$350
$400
2004 2005 2006 2007 2008 2009
Backlog
(millions)
0.210.29
0.75
1.30
0.36
0.55
$0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
2004 2005 2006 2007 2008 2009
Diluted EPS ($)
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Slide 7
CEO & Leadership…each day
Operational…focusing the organization on short-term results
Strategic…positioning the organization for future growth
– Each day we must execute on both
– We utilize a strategic and operational scorecard (template) to keep us
focused and aligned
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Slide 8
2009 Operational Accomplishments & Strategic Transformation
Operational accomplishments
1. Operating income of 4.3% and after-tax income of 2.7% despite a 49% drop in sales
2. Did not reduce dividend payment
3. Increased backlog 45.7% to $247.6 million
4. Positive operating cash flow of $38.1 million
Strategic transformation
1. Diversification acquisition of Utilimaster (delivery and service) for $43 million, will diversify 2010 revenues by approximately 21%, Utilimaster revenues approximately $105 million for 2009
– Synergistic service and bill-of-material cost reduction opportunities
– Development of step van and truck chassis by Spartan Chassis
2. Market and Leverage Team structure vs SBUs (single business units) –operating costs reduced by $16 million in 2009
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Slide 9
Great Engineer - Definition
Communication – understands people, empathetic
Financial – understands income and balance sheet
Market research excellence – data informed, intuitive wise,
decision driven in such a manner where they bring
opportunities to sales or challenge sales in an appropriate
manner
Great engineer – engineers products that are easy to build,
profitable, and “compel” the consumer to want it
Note: Started the RV business at Spartan in 1985 with this exact
person – Larry Karkau; those that have these 4 demonstrated
capabilities have a future with no limits
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Slide 10
Empathy – PeopleHow Does One Develop It?
Talk to people, show an interest, learn
Read 25+ publications per month and 3 to 4 newspapers per day
Learn from the past, observe today, extrapolate to tomorrow (I
learned this approach at my first Anthropology class at MSU)
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Slide 11
To “Compel” Look Where Others Normally Don’t…
To “compel,” the product or service is typically uniquely
different – “Items Important to the Customer (ITCs)” as we call
them
The proverbial “hidden desire” or “unmet need”
To provide clarity where this hidden desire / unmet need may
be, look at data points, trends, and technology that can be
applied to your (or give you insight) marketplace in areas where
others normally would not go
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Slide 12
Innovative…Importance to the Stakeholder
Spartan Motors, Inc. Process
Data informed, intuitive wise,
decision driven
For any market (current and future)
there must be a blend of:
1. Initiatives meant to “Defend &
Extend (D&E)” your market share (evolutionary)
2. Initiatives that “Change the
Structure (CTS)” of the market to
either gain significant market
share or create a new market (revolutionary)
Source: Harvard Business Review
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Slide 13
Data Trends
Graying of America: 11,000 people a day turn 50
Handicap: Over 54 million people in North America have some sort of physical handicap
Calls for Help are Constant: Every 1.25 seconds there is a call for help
2016 CAFÉ (corporate average fuel economy), 35 mpg passenger car standard
Internet retail commerce is up 182% from 2002 to 2007
Only 24.7% of the world’s population uses the Internet today
Defense Conflict and Terrorism: Improvised explosive devices (IEDs) are cheap, readily available, and effective. There are 250 IED blasts per month worldwide - #1 killer in Iraq, Afghanistan. There are over 100,000 kidnappings a year or 274 per day
“Green” and Alternative Fuels are the Future
– $104 billion spent by U.S. consumers on Green goods and services in 2008
– The price per barrel of oil is up 112% from 2004
– $350k is the fuel cost allocated to a solder in Afghanistan
Globalization & Emerging Markets: 86% of the world population will live in emerging markets by 2050
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Slide 14
First Response All Calls (FRAC)
A multipurpose product that has fire,
rescue, ambulance, command/control,
Hazmat, etc. capability
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Slide 15
NEAT (Non-Emergency Ambulance Transport)
Data
– Low cost transport with ER capability
serving the growing elderly population
(11,000 people a day turn 50)
– 60 million people in the US are considered
handicapped
– 145,732 cabs in service in the US and
Canada
– “Medical / Handicap / Transport / Taxi,” a
new market where the services can be
reimbursed by health care providers and
the federal government
ITCs (items important to the customer)
– Low acquisition cost – less than $50k
– Low operating cost – 20 to 25 mpg
– Ease of purchase / installation
– Limited emergency response capability
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Slide 16
Defense Products / Initiatives
Survivable Wheeled Vehicles
Expansion of aftermarket parts and assemblies (2009)
Iraqi Light-Armored Vehicle (ILAV) (2010)
Medium Mine-Protected Vehicle (MMPV) (2010)
Foreign military (2010)
Refurbishment of current MRAP Fleet (2010)
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Slide 17
Growth – where will it come from?Mergers, Acquisitions,
Partnerships, and New Markets
Acquisition of Utilimaster
– $105 million in annual sales will enable
Spartan to diversify 21% of 2010 SMI
consolidated sales into the delivery and service market (step vans, walk-in vans, truck
bodies)
– Opportunity for Spartan Chassis to
develop step van chassis and specialty
truck chassis – Utilimaster volume is
from 6,000 units per year
– 550,000 sq ft
manufacturing space
units per year
– 500 employees
– Key customers: UPS,
FedEx, Purolator, Cintas,
Budget, Entenmann’s
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Slide 18
Growth – where will it come from?Mergers, Acquisitions,
Partnerships, and New Markets
Global
– China – Spartan Chassis recently obtained a 22 fire-truck chassis order for Beijing, China
– Develop opportunities for Spartan brands –Crimson Fire, Road Rescue, Utilimaster
– Only 4% of Spartan sales are for export
Specialty – drill rig chassis for mobile drilling
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Slide 19
Growth – where will it come from?
Expanding Existing Markets
Emergency response
– Furion fire-truck and ambulance chassis, NEAT
– Bodies for walk-in rescues, command control, Hazmat
– FRAC, Legend, 75 ft aerial, Boomer
Outdoor / RV(SC logo)
– NGP
– Fleetwood exclusivity
Defense / Government Services Administration
– Increase number of OEM partners
– Develop opportunities for all brands
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Slide 20
Growth – where will it come from?Aftermarket Parts & Assemblies (APA)
Over 100,000 Spartan-related vehicles in operation
Increase number of bids / opportunities in defense / GSA
Develop opportunities for
Develop additional products / partner to be sold through Spartan’s service / distribution network
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Slide 21
John Sztykiel – Staying Focused (with me at all times / handout)
Strategic directives
Strategic and operational scorecard
Leadership virtues
Leadership lessons
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Slide 22
Today, Tomorrow…
SPAR’s Strategic Directives
Social
Responsibility
Green
Financial
Stewardship
Speed &
Agility
Global
Value
Maximization
Brand
Leadership
Innovative
Lean
Customer
Centric
These directives will guide us in all that we do
KPIs will be established by 3/31/10
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Slide 23
It’s Your Life
With dreams, one can change a day.
With great vision, one can change the world.
It’s your life.
…John Sztykiel