Month of May meeting Utilimasters expections
Posted: 05/07/2012 at 1:15 am
By: Marilyn Odendahl
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Utilimaster President John Forbes, right, talks with Isuzu's Yoko Yamada, left, Tuesday, October 25, 2011 prior to the start of a press conference launching the new Reach truck, which is affiliated with both companies. The event was held on a the production floor of the plant in Wakarusa where the Reach will be built. (Truth Photo By Jennifer Shephard) ¬ ¬ ¬
$PHOTOCREDIT_ON$Utilimaster President John Forbes is pictured Oct. 24, 2011, during a press conference launching the company’s new Reach truck. Forbes is optimistic May will be a good month for his company.$PHOTOCREDIT_OFF$
Truth Photo By Jennifer Shephard
Utilimaster President John Forbes comments Tuesday, October 24, 2011 during a press conference launching the new Reach truck. The Wakarusa event featured the new Reach trucks and remarks from representatives from Spartan and Isuzu, which work jointly on the vehicles. (Truth Photo By Jennifer Shephard) ¬ ¬ ¬
“All will come together in May,” he said.
Even though it is just seven days old, the month has already produced some highlights for the truck body manufacturer. Earnings results released May 1 show sales at the company boomed during the first quarter and the Bristol Town Council gave preliminary approval May 4 to an incentive package which will help Utilimaster with its move from Wakarusa to Bristol.
For the first quarter of 2012, Utilimaster’s parent, Spartan Motors Inc., reported a 25 percent increase in sales year over year to $118.8 million. That boost came largely from strong sales growth at Utilimaster. Vehicles sales at Utilimaster nearly doubled to $37.1 million from $19.4 million during the quarter while aftermarket parts and accessories sales skyrocketed to $21.7 million from $4.3 million.
Despite relocating all operations into the former Odyssey Building in Bristol, Utilimaster is expecting to continue to improve upon the 2011 performance.
“Going forward for the full year, we’re still anticipating seeing a great year for Utilimaster year over year, 2011 versus 2012,” Joe Nowicki, Spartan chief financial officer, told investors. “For the full year, it won’t be at that same level but we’re still anticipating that growth being in high single digits in our Utilimaster entity year over year.”
Speaking prior to Friday’s meeting of the Bristol Town Council, John Forbes, Utilimaster president, shared Nowicki’s confidence.
“We do expect to grow this year,” he said. “When you look around at the industry and the product delivery operations, we expect to grow our business as we push forward.”
Utilimaster’s move into a more modern facility will aid the company’s sales growth, according to John Sztykiel, Spartan president and CEO. In particular, a major bottle neck caused by the paint shop at the Wakarusa plant will be eliminated.
The current paint shop can only handle a limited amount of vehicles per day which, in 2011, caused Utilimaster turn away orders.
“So, you know, honestly, I feel very, very good with the market and the high single digit growth which we’re forecasting in delivery and service,” Sztykiel said to investors. “Do we expect to be greater in 2013? Absolutely because we’ll have a great product plus we’ll also be able to supply more of what the market demands.”
S.R. 19 PROPERTY
Utilimaster’s 95.2- acre campus on S.R. 19 in Wakarusa is now on the market with the “For Sale” signs expected to be installed this week. The real estate is being handled by FM Stone Commercial and is being marketed as available for purchase either as a complete unit or in smaller parcels.
“The property is actually very nice,” said Brent Miller, senior vice president at FM Stone. “They’ve really maintained the buildings. They’re very clean so I was very impressed.”
Utilimaster has been making extensive plans for the move, Forbes said. Already, the manufacturer has been doing some minor prep work at the new location and, with the abatement agreement nearing finalization, is getting ready to do more renovation to the building.
Office personnel and support teams are expected to begin moving in the summer, he said. The first major production line will be relocated between October and December.
As for the move disrupting internal communications and coordination, Forbes said he is not concerned. He noted the capabilities of electronic connectivity will enable the employees to remain in contact with each other and, if they need to physically meet, the two facilities are only about a 20 minute car ride apart.
Utilimaster will be leaving behind 16 buildings which comprises about 540,000 square-feet under roof. When the company announced its intent to shift its operations to Bristol, it said it would be tearing down two buildings on the Wakarusa campus before it left. However, Forbes has backed away from those plans, saying the manufacturer will make that decision as any potential sale advances since the buyer may want those older structures.
Miller is optimistic the Wakarusa property will be sold. Not only is the local commercial real estate posting a strong start in 2012 but also the pool of available buildings 100,000-square –feet and larger has become limited with buyers snatching the inventory.
The Utilimaster listing will meet some of that need for bigger production buildings, he said.
To ease traffic congestion on Maple Street once Utilimaster starts production, the town council has developed plans to connect Earthway Boulevard to S.R. 15. The proposed stretch of new road would be about a half mile long and would meet S.R. 15 at the point where Bloomingdale Drive joins the thoroughfare.
That intersection, about a mile south of U.S. 120, would be enhanced with deceleration lanes and a traffic light.
Currently, Earthway Boulevard dead ends into Maple Street. As Utilimaster begins moving shipments, the two-lane road will be put under considerable stress since the trucks will need to travel Maple Street north to access U.S. 120 or south to reach C.R. 10.
Wightman Petrie, Inc., has estimated the cost of the extension to be $3.9 million.
Town Manager Bill Wuthrich budget constraints are keeping the plans on hold.