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January 7,1997.... Richmond, Indiana based vehicle (school bus and delivery van) manufacturer, Carpenter Industries, Inc. announced today an agreement which will significantly increase their financial strength and bring extensive benefits according to Mr. Timothy S. Durham, Carpenter President & CEO. According to Mr. Durham, "Charlotte, Michigan based Spartan Motors, Inc., Recovery Equity Investors (REI) of San Mateo, California, and SerVaas, Inc. are investing approximately 30 million dollars in Carpenter Industries, Inc. Under this arrangement Spartan Motors, REI, and SerVaas will each hold two seats on the board of directors of Carpenter Industries, Inc."

According to Mr. Durham, "The equity investment will bring the necessary resources to ensure that Carpenter can grow and build on its long history as a leader in the school bus industry. This new arrangement will greatly benefit our efforts as we ramp up the new Richmond, Indiana facility to full production, work to increase our share of the school bus market, and seek new growth areas such as the step van market."

Carpenter Industries has recently completed its relocation to a 565,000 square foot facility in Richmond, Indiana which offers three times the capacity of the former Mitchell, Indiana operation. The more modern expansive facility offers many benefits including a more productive, cost efficient manufacturing process, and added product diversity from its traditional school bus products. In addition, Carpenter recently introduced a new step van product for use in areas such as parcel delivery trucks, snack foods, beverage and tool delivery vehicles. Carpenter expects to introduce a new step van on a newly designed Spartan chassis in mid-1997.

"The annual school bus market of 36,000 vehicles and the step van industry of similar volume provides excellent growth potential for the forseeable future for which our facility is ideally suited," stated Mr. Durham.

"Each of our new partners brings a strength to Carpenter. REI has extensive investments in other manufacturing operations with an eye for long term steady growth business and markets. Their input will be a great benefit to us as we grow. Spartan Motors is a leading manufacturer of custom chassis for motor homes, fire trucks, and transit buses; and has been supplying Carpenter with the Carpenter Counselor model front and rear engine chassis for the past several years. Spartan’s product support, manufacturing experience, and engineering expertise will be invaluable as we proceed," Mr. Durham stated.

Spartan Motors Chairman and Chief Executive Officer, George Sztykiel, stated, "Spartan Motors and the board of directors have been acquisition minded for sometime, but we have been patient, and this patience has paid off. Our alliance with Carpenter presents an exciting challenge for Spartan as we use our management experience and abilities to improve efficiencies, increase profitability, and grow the business for both companies."

According to Dr. Bert SerVaas, Chairman of SerVaas, Inc., "The transformation of Carpenter from 1990, when first acquired, until now has been a challenging era, but we continuously pursued our vision of becoming, not the largest, but the best manufacturer of vehicles in our industry. We feel we now have the facility, products, resources, and the people to achieve this objective. The inclusion of our new partners adds many additional benefits from which our customers and dealers will reap major rewards."

"Our investment in Carpenter ensures we have the necessary management and operations input to grow both Carpenter’s share of the market and Spartan’s chassis business," stated John Sztykiel, Spartan Motors President and Chief Operating Officer. "We are in a unique position to simultaneously grow our profits and sales, and strengthen the return on our investment through one strategic alliance."

Carpenter Industries, Inc. has in excess of 700 employees manufacturing products under the trade name of "Crown" at the following location:

1100 Industries Road
Richmond, IN 47374
Phone: 765-965-4000
Fax: 765-965-4125

For additional information on Carpenter Industries, please contact Terry Whitesell, Executive Vice President of Sales and Marketing, at the above location

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