Sales Surge 26% to $72.5 Million in the
Quarter
Quarterly Net Income Grows to $0.10 Per Share
Versus $0.02 a Year Ago
Supreme Industries, Inc. (NYSE MKT: STS), a leading
manufacturer of specialized commercial vehicles including truck
bodies and specialty vehicles, today announced financial results
for its fourth quarter ended December 28, 2013. All earnings per
share and share figures have been adjusted for the 5% stock
dividend distributed in the second quarter of 2013.
2013 Fourth-Quarter Results
Consolidated net sales for the fourth quarter increased 25.6%,
to $72.5 million, compared with $57.7 million last year. The
revenue increase was attributable to a fall fleet build and
improved retail demand for truck bodies, partially offset by lower
sales volume in the specialty vehicle and bus divisions.
Gross margin expanded to 15.2% of quarterly sales, compared with
13.2% in last year’s fourth quarter, despite margin pressure in the
bus product line. The margin improvement, combined with higher net
sales, drove gross profit up to $11.1 million, or a 45.7% increase
from the $7.6 million reported in the fourth quarter of 2012. The
margin expansion is primarily due to product mix, continued
manufacturing efficiency improvements and higher capacity
utilization.
An income tax expense of $0.7 million was recorded in the
quarter due to the Company’s return to normalized tax rates. In
last year’s comparable period, the Company recorded an income tax
benefit of $0.1 million that included the reversal of a deferred
tax valuation allowance due to improved profitability.
Net income for the fourth quarter was $1.7 million, or $0.10 per
diluted share, up from net income of $0.4 million, or $0.02 per
diluted share, last year.
During the quarter, the Company announced its intention to
divest the highly competitive shuttle bus business. The
increasingly competitive environment in the bus industry has led to
higher discounting making it more difficult to meet Supreme’s
profitability objectives. While shuttle bus products represented
less than 13% of the Company’s consolidated 2013 sales, the
business generated unacceptable margins in 2013.
On a proforma basis, adjusting and eliminating the net losses of
the shuttle bus business (including costs associated with the King
County lawsuit) and normalizing the 2012 income tax expense,
diluted earnings per share more than doubled to $0.13, compared
with $0.05 a year ago. A reconciliation of net income and net
income per share is included with this press release.
“The decision to divest the shuttle bus business is expected to
help us maximize shareholder value by optimally allocating
resources where they will earn the highest return. Supreme’s core
business of manufacturing and selling customized truck bodies has
recently undergone successful facilities and manufacturing process
upgrades, resulting in better operating efficiencies and expanding
margins for these products,” said President and Chief
Executive Officer Mark Weber.
2013 Full-Year Results
Consolidated net sales for the twelve-month period decreased
1.4%, to $282.3 million, from $286.1 million last year, due to
lower bus and specialty vehicle sales offset by increased truck
body volume. For the twelve months, gross profit increased to $46.8
million, from last year’s $43.5 million. Gross margin, as a
percentage of sales, increased to 16.6%, compared with 15.2% in
2012. The margin growth reflects improved product mix and
margin-expansion initiatives including process improvements,
manufacturing efficiencies and competitive sourcing.
Income tax expense increased by $3.2 million versus last year
resulting from the normalized tax rates in 2013, and last year’s
reversal of the valuation allowance.
Reported net income for the twelve months was $6.4 million, or
$0.39 per diluted share, compared with $11.8 million, or $0.73 per
diluted share last year. On a proforma basis, adjusting and
eliminating for the impact of the shuttle bus business (including
costs associated with the King County lawsuit) and normalizing the
2012 income tax expense, diluted earnings per share for the full
year improved to $0.68 compared to $0.53 for 2012.
Backlog at the end of the year increased 28.4% to $71.5 million,
compared with $55.7 million at the end of 2012, excluding shuttle
bus business.
Additional year-over-year key performance indicators
include:
- Working capital was $37.6 million at
December 28, 2013, compared to $38.6 million for the fourth quarter
2012.
- Net cash provided by operating
activities in 2013 was $13.5 million, compared with $12.4 million
in 2012.
- Total debt declined more than 30% to
$9.7 million at year end, compared with $14.1 last year.
- Stockholders’ equity increased 10.3% to
$74.1 million at December 28, 2013, compared with $67.2 million at
December 29, 2012.
- Book value, on a per-share basis, grew
to $4.59 at year-end versus $4.20 at the end of last year.
“The pending divestiture of the shuttle bus business represents
a continued transition towards an organizational focus on
profitable growth. As we enter 2014, we are encouraged by the
opportunities we see in the work truck and specialty vehicle
product lines, where customers value high-quality products and
dependable delivery performance. Supreme will celebrate its 40th
Anniversary during 2014, which is a direct result of our dedicated
employees and loyal customers,” Weber concluded.
Conference Call Information
A conference call will take place tomorrow, February 14, 2014,
at 9:00 a.m. EST to review the 2013 fourth-quarter and full-year
results. To participate in the live call, dial 877-300-8521
(International: 412-317-6026) 10 minutes before the call begins, or
at 8:50 a.m. EST. The conference ID is 10040843. The call also will
be streamed live and can be accessed at http://www.SupremeInd.com.
Those unable to participate in the live conference call may access
a replay, which will be available on Supreme’s website for
approximately 30 days.
About Supreme Industries
Supreme Industries, Inc. (NYSE MKT: STS), is a nationwide
manufacturer of truck bodies and specialty vehicles produced to the
specifications of its customers. The Company's transportation
equipment products are used by a wide variety of industrial,
commercial and law enforcement customers.
News releases and other information on the Company are available
on the Internet at: http://www.supremeind.com or
http://www.b2i.us/irpass.asp?BzID=1482&to=ea&s=0
Other than historical facts contained herein, the matters set
forth in this news release are “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act, as
amended, and reflect the view of management with respect to future
events. When used in this report, words such as “believe,”
“expect,” “anticipate,” “estimate,” “intend,” “plan” and similar
expressions, as they relate to Supreme or its plans or operations,
identify forward-looking statements. Such forward-looking
statements are based on assumptions made by, and information
currently available to, management. Although management believes
that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that the expectations
reflected in such forward-looking statements are reasonable, and it
can give no assurance that such expectations will prove to be
correct. Important factors that could cause actual results to
differ materially from such expectations include, without
limitation, an economic slowdown in the specialized vehicle
industry, limitations on the availability of chassis on which
Supreme’s product is dependent, availability of raw materials, raw
material cost increases and severe interest rate increases.
Furthermore, Supreme can provide no assurance that any raw material
cost increases can be passed on to its customers through
implementation of price increases for Supreme’s products. The
forward-looking statements contained herein reflect the current
view of management with respect to future events and are subject to
those factors and other risks, uncertainties and assumptions
relating to the operations, results of operations, cash flows and
financial position of Supreme. Supreme assumes no obligation to
update the forward-looking statements or to update the reasons
actual results could differ from those contemplated by such
forward-looking statements.
—FINANCIAL RESULTS FOLLOW—
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income Three
Months Ended Twelve Months Ended December
28, December 29, December 28,
December 29, 2013 2012 2013 2012
Net Sales $ 72,534,328 $ 57,728,124 $ 282,273,299 $ 286,140,112
Cost of sales 61,475,298 50,135,847
235,520,946 242,644,088
Gross
profit 11,059,030 7,592,277 46,752,353 43,496,024
Selling, general and administrative expenses 8,659,771 7,371,194
34,167,348 31,602,317 Legal settlement and related costs - 161,329
3,600,161 616,744 Other income (98,529 ) (450,472 )
(925,537 ) (1,217,057 )
Operating income
2,497,788 510,226 9,910,381 12,494,020 Interest expense
87,836 241,705 625,190
971,225
Income before income taxes 2,409,952
268,521 9,285,191 11,522,795 Income tax expense (benefit)*
744,450 (115,056 ) 2,859,315
(310,190 )
Net income $ 1,665,502 $ 383,577
$ 6,425,876 $ 11,832,985
Income per
share: Basic $ 0.10 $ 0.02 $ 0.40 $ 0.74 Diluted 0.10 0.02 0.39
0.73
Shares used in the computation of income per
share: (Adjusted for 5% stock dividend paid on June 3, 2013)
Basic 16,180,874 15,980,849 16,113,136 15,954,564 Diluted
16,581,208 16,219,930 16,487,804 16,212,508
* The Company reported a tax benefit for both periods of 2012,
resulting from the utilization of previously unrecognized net
operating loss carryforwards.
Supreme Industries, Inc. and
Subsidiaries
Consolidated Balance Sheets December
28, December 29, 2013 2012
Assets Current assets $ 65,923,357 $ 61,007,286 Property,
plant and equipment, net 46,387,839 42,937,988 Other assets
1,219,655 1,142,809
Total assets $ 113,530,851 $
105,088,083
Liabilities Current liabilities $
28,343,456 $ 22,363,408 Long-term liabilities 11,107,228
15,561,793
Total liabilities 39,450,684 37,925,201
Total stockholders' equity 74,080,167
67,162,882
Total liabilities and stockholders' equity $
113,530,851 $ 105,088,083
Supreme Industries, Inc.
and Subsidiaries Reconciliation of Net Income and Net Income
Per Share Three Months Ended
Twelve Months Ended December 28, December 29,
December 28, December 29, 2013 2012
2013 2012 Net income, as reported $
1,665,502 $ 383,577 $ 6,425,876 $ 11,832,985
Normalized taxes (2012 periods adjusted to
2013 effective tax rate, net of tax benefit reported in 2012)
-
197,760
-
3,859,211
Tax adjusted net income before
shuttle bus operations 1,665,502 185,817 6,425,876 7,973,774
Shuttle bus operations (including legal costs): Reported
legal settlement and related costs
-
161,329 3,600,161 616,744 Shuttle bus loss from operations, net of
legal above 750,459 883,427 4,236,270
334,587 Total shuttle bus operations 750,459
1,044,756 7,836,431 951,331
Tax effect (shuttle bus rates–39.1% for
2013, 39.4% for 2012 periods)
293,429 411,634 3,064,045
374,824 Total adjustment, net of tax 457,030
633,122 4,772,386 576,507
Adjusted
net income $ 2,122,532 $ 818,939 $ 11,198,262 $
8,550,281
Per Share Data: Net Income
(as reported, not calculated on this schedule) Basic $ 0.10 $
0.02 $ 0.40 $ 0.74 Diluted 0.10 0.02 0.39 0.73
Adjusted income
tax expense Basic
-
(0.01 )
-
(0.24 ) Diluted
-
(0.01 )
-
(0.24 )
Shuttle bus operations Basic 0.03 0.04 0.30 0.04
Diluted 0.03 0.04 0.29 0.04
Adjusted net income Basic $ 0.13 $ 0.05 $ 0.70 $ 0.54
Diluted 0.13 0.05 0.68 0.53
Shares used for per-share
calculations: (Adjusted for 5% stock dividend paid on June 3,
2013) Basic 16,180,874 15,980,849 16,113,136 15,954,564 Diluted
16,581,208 16,219,930 16,487,804 16,212,508
Supreme Industries, Inc.Investor and Media Contact:Matthew J.
Dennis, CFA, Supreme Investor Relations, 574-228-4130
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