Spartan Motors Highlights Quarterly Results

Gross margin of 15.4%; Increased 21.3% compared to fourth quarter 2007

CHARLOTTE, Michigan, April 24, 2008 - Spartan Motors, Inc. reported its best quarter in company history with a 84.8 percent year-over-year increase in revenues and a 105.1 percent year-over-year increase in net earnings.

First Quarter Results

Spartan reported net earnings of $14.8 million, or $0.45 per diluted share, on net sales of $264.1 million in the first quarter ended March 31, 2008, compared with net earnings of $7.2 million, or $0.22 per diluted share, on net sales of $142.9 million in same quarter of 2007.

"The first quarter was an illustration of our flexible manufacturing model, which enabled us to take advantage of our multiple market strategy," said John Sztykiel, president and CEO of Spartan Motors. "As we experienced lower demand for motorhome chassis, we emphasized our operational focus on products for our military and emergency-rescue customers. We rescaled our motorhome chassis operations to accommodate the expected decrease in industry demand. The result was increased sales and improved efficiencies."

Spartan Motors' consolidated backlog decreased 5.1 percent year-over-year to approximately $237.3 million as of March 31, 2008. Spartan Motors anticipates fulfilling its current backlog orders by January 2009. The current backlog does not include the $45 million order from General Dynamics Land Systems and Force Protection announced in April 2008.

Spartan reported gross margin of 15.4 percent in the first quarter of 2008, a decrease compared with gross margin of 17.3 percent in the same period in 2007, but a 21.3 percent improvement over gross margin of 12.7 percent for the 2007 fourth quarter. Spartan attributed the year-over-year decrease in gross margin to product mix and volume pricing pressures from its military customers. Spartan reported the increase in gross margin compared to the 2007 fourth quarter was due to improved operational efficiencies.

Spartan Chassis

Sales at Spartan Chassis, the company's largest subsidiary and operating unit, increased 91.6 percent year-over year to $245.3 million for the 2008 first quarter. Sales from Spartan Chassis were 92.9 percent of Spartan Motors' total consolidated sales in the 2008 first quarter. First quarter net earnings at Spartan Chassis improved 99.1 percent year-over-year, and the unit's backlog as of March 31, 2008 increased 6.9 percent year-over-year.

Spartan's chassis sales to the Class A diesel motorhome market decreased 32.1 percent year-over-year in the 2008 first quarter, a favorable comparison to the 33.3 percent year-over-year decrease in industry wholesale shipments for the first two months of 2008, the latest data available from the Recreational Vehicle Industry Association (RVIA). Spartan's backlog for RV chassis decreased 53.6 percent year-over-year to $17.5 million as of March 31, 2008.

Sales of fire truck chassis decreased 2.9 percent in the first quarter of 2008 compared to the same period of last year. Backlog for fire truck chassis at the end of the 2008 first quarter was $70.7 million, a 16.2 percent decrease compared to the 2007 first quarter. Compared to the fourth quarter 2007, backlog for fire truck chassis increased 17.1 percent as Spartan's OEM customers improved production in response to better competitive conditions.

Other product sales, including specialty chassis for MRAP military vehicles, and Spartan Chassis' growing service, parts and accessories (SPA) business, increased 330.2 percent year-over-year in the first quarter of 2007. Backlog for other products increased 86.5 percent year-over-year to $99.2 million as of March 31, 2008.

Emergency Vehicle Team (EVTeam)

Spartan's EVTeam operating unit, consisting of its Crimson Fire, Crimson Fire Aerials and Road Rescue subsidiaries, reported a 13.3 percent year-over-year increase in sales for the 2008 first quarter. Though the unit posted a net loss for the quarter, the EVTeam reported a 39.6 percent improvement in segment bottom-line compared to the first quarter of 2007, and a 75.5 percent improvement compared to the fourth quarter of 2007.

Financial Position

Spartan reported an operating cash flow decrease in the 2008 first quarter of $26.6 million compared to a decrease of $6.6 million in the same quarter of 2007, driven largely by increased working capital needs required by the 84.8 percent year-over-year increase in sales in the 2008 first quarter.

On a consolidated basis, Spartan posted a return on invested capital (ROIC) of 42.6 percent in the first quarter of 2008, compared to ROIC of 25.7 percent for the same quarter in 2007. Spartan defines return on invested capital as operating income less taxes, on an annualized basis, divided by total shareholders' equity.

The company ended the quarter with $84.6 million in long-term debt, which includes financing for Spartan Chassis' new facilities, as well as growth in working capital to support the sales increase. Spartan reported $5.3 million in cash and cash equivalents at the end of the 2008 first quarter.

Future Outlook

"We believe our improved production efficiencies, along with our strong consolidated backlog, will help generate significant cash flow in the second half of 2008, which will be utilized to grow the business and reduce debt," said Sztykiel. "Based on key indicators such as increased emergency-rescue orders in the first quarter, a slight improvement in motorhome chassis orders in March, and the recent new orders from two of our military customers, we are optimistic about 2008, yet we remain mindful of the difficult economic conditions affecting one of our core markets.

"Looking ahead to the future, we remain a strategic supplier to the hardened vehicle market for the U.S. and allied foreign militaries for MRAP and similar programs. We are promoting six new products in 2008 that will drive sales starting in 2009. At Spartan Chassis, we are entering the commercial part of the fire truck chassis and the First Response All Call (FRAC) market through the Furion chassis. We are also adding more body up-fit work to our motorhome chassis.

"At Crimson Fire, we are promoting the Boomer, entering the Government Services Administration/Wildfire (GSA) market and showing a FRAC product developed jointly with Road Rescue. At Road Rescue, we are adding a new handicap accessible transport ambulance in addition to the joint FRAC product with Crimson Fire. Between these new market opportunities and our growing service, parts and accessories business, we like our prospects for 2009 and beyond."

Conference Call & Webcast

Spartan Motors will host a conference call for analysts and portfolio managers at 10 a.m. ET today to discuss these results and current business trends. To listen to a live webcast of the call, please visit www.spartanmotors.com, click on "Shareholders," and then on "Webcasts."

About Spartan Motors

Spartan Motors, Inc. www.spartanmotors.com designs, engineers and manufactures custom chassis and vehicles for the recreational vehicle, fire truck, ambulance, emergency-rescue and specialty vehicle markets. The Company's brand names - SpartanPTMP, Crimson FirePTMP, Crimson Fire AerialsPTMP, and Road RescuePTMP - are known for quality, value, service and being the first to market with innovative products. The Company employs approximately 1,300 at facilities in Michigan, Pennsylvania, South Carolina, and South Dakota. Spartan reported sales of $681.9 million in 2007 and is focused on becoming the premier manufacturer of specialty vehicles and chassis in North America.