Second Quarter GAAP Earnings Per Diluted Share
Increases to $0.25 versus $0.06 Prior Year
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 second quarter ended June 28, 2014. The Company divested
its unprofitable shuttle bus operations in March 2014, which have
been reclassified as discontinued operations in its financial
statements.
2014 Second-Quarter ResultsConsolidated net sales from
continuing operations grew to $71.6 million in the second quarter,
reflecting a 3.8% increase compared with $68.9 million during the
second quarter of last year. Net income per diluted share was $0.25
versus $0.06 during the second quarter of 2013; on a continuing
operations basis, net income per diluted share was $0.25 and $0.24
for the respective periods.
Gross profit from continuing operations was $14.6 million, or
20.5% of sales, compared with $14.5 million, or 21.1% of sales, in
the second quarter of 2013. The current quarter margin percentage
contraction was primarily due to customer and product mix.
Additionally, prior year margins benefited from a greater
proportion of higher-margin retail truck sales with fleet orders
being placed later than normal in 2013. This year, fleet ordering
patterns have returned to normal and as a result, the second
quarter of 2014 included a higher percentage of fleet business
versus the prior year.
Supreme settled a lawsuit in the second quarter of 2013 that
contributed to a $3.0 million after-tax net loss being recorded in
its discontinued shuttle bus operations for that quarter. Including
the negative impact from discontinued operations on 2013’s results,
reported net income improved to $4.3 million in the quarter, or
$0.25 per diluted share, up from reported net income of $0.9
million, or $0.06 per diluted share, in last year’s comparable
quarter.
Operating income from continuing operations in the second
quarter of 2014 was $6.4 million, equal to last year’s second
quarter operating income. Income tax expense declined in the second
quarter to $2.1 million, from $2.4 million in the same quarter last
year, due to lower effective tax rates. Net income from continuing
operations improved to $4.3 million, or $0.25 per diluted share
during the second quarter of 2014, up from $4.0 million, or $0.24
per diluted share in the same quarter of 2013.
“Business conditions remained solid during the spring and the
OEM chassis shortage that hampered financial performance in the
first quarter has been mitigated. This allowed us to generate
improvements in both sales and earnings in the second quarter,”
said Mark Weber, President and Chief Executive Officer.
2014 First-Half ResultsConsolidated net sales from
continuing operations in the first half of 2014 were basically flat
with last year at $124.9 million, versus $125.3 million.
“During the first half of the year we made notable talent and
training investments in our marketing and sales organizations. We
also rolled out our proprietary, lightweight body wall, FiberPanel™
HC, that allows customers to reduce operating costs by increasing
payload. Our investments in both product and customer facing talent
are in support of our profitable growth agenda for Supreme,” Weber
added.
Gross margin, as a percentage of sales, contracted to 18.0%,
compared with 20.5% in 2013’s first half. This resulted in first
half gross profit declining to $22.5 million, compared with $25.6
million in last year’s comparable period primarily due to
unfavorable product mix, shortages of light duty chassis and severe
weather conditions in the first quarter of 2014. Income from
continuing operations in the first half of 2014 was $4.5 million,
compared with $6.6 million a year ago.
The net loss generated by the Company’s discontinued operations
in the first half of 2014 totaled $1.6 million, compared with $3.4
million in the first half of 2013. Including the impact of
discontinued operations from both periods, reported net income for
the 2014 six months was $2.9 million, or $0.17 per diluted share,
compared with $3.2 million, or $0.20 per diluted share in 2013.
Sales order backlog at the end of the quarter was $56.8 million,
and $62.9 million at the end of the second quarter of 2013. Second
quarter 2013 backlog included $8.9 million of fleet orders that
were placed later than normal in the year.
Additional financial highlights:
- Cash and equivalents increased to $12.5
million, up from $3.9 million at December 28, 2013.
- Net cash provided by operating
activities during the first half of 2014 was $6.2 million, compared
with $4.5 million of net cash generated by operations in 2013.
- Stockholders’ equity increased to $77.6
million at June 28, 2014, compared with $74.1 million at December
28, 2013.
Conference Call InformationA conference call will be held
tomorrow, July 25, 2014, at 9:00 a.m. ET to review the second
quarter and first half results. To participate in the live call,
dial 877-300-8521 (International: 412-317-6026) 10 minutes before
the call begins, or 8:50 a.m. ET. The conference ID is 10049392.
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 IndustriesSupreme 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
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended
Six Months Ended June 28, June
29, June 28, June 29, 2014
2013 2014 2013 Net Sales $ 71,552,068 $
68,909,290 $ 124,945,625 $ 125,280,459 Cost of sales
56,914,412 54,386,401 102,417,462
99,654,522
Gross profit 14,637,656
14,522,889 22,528,163 25,625,937 Selling, general and
administrative expenses 8,301,473 8,126,775 15,821,463 15,931,705
Other income (61,970 ) (16,733 ) (99,195 )
(723,695 )
Operating income 6,398,153 6,412,847
6,805,895 10,417,927 Interest expense 77,335
39,472 153,446 137,565
Income from continuing operations
before income taxes
6,320,818 6,373,375 6,652,449 10,280,362 Income tax expense
2,065,386 2,399,580 2,173,000
3,696,085
Income from continuing
operations 4,255,432 3,973,795
4,479,449 6,584,277 Discontinued
operations:
Gain on sale of Bus operations, net of
tax
- - 87,036 - Operating loss of discontinued Bus operations, net of
tax - (3,048,664 ) (1,654,459 )
(3,355,340 ) Loss of discontinued Bus operations, net of tax
- (3,048,664 ) (1,567,423 ) (3,355,340
)
Net income
$ 4,255,432 $ 925,131 $ 2,912,026 $ 3,228,937
Basic income (loss) per share: Income from
continuing operations $ 0.26 $ 0.25 $ 0.27 $ 0.41 Loss from
discontinued operations - (0.19 ) (0.09
) (0.21 )
Net income
$ 0.26 $ 0.06 $ 0.18 $ 0.20
Diluted income (loss) per share: Income from continuing
operations $ 0.25 $ 0.24 $ 0.26 $ 0.40 Loss from discontinued
operations - (0.18 ) (0.09 )
(0.20 ) Net income $ 0.25 $ 0.06 $ 0.17 $ 0.20
Shares used in the computation of income (loss)
per share: Basic 16,341,887 16,098,387 16,258,466
16,053,098 Diluted 16,757,781 16,462,115 16,705,887 16,356,692
Supreme Industries, Inc. and
Subsidiaries
Condensed Consolidated Balance Sheets
June 28, 2014 Dec. 28, 2013
Assets (Unaudited) Current assets $ 64,914,748 $ 65,923,357
Property, plant and equipment, net 46,358,183 46,387,839 Other
assets 1,067,195 1,219,655
Total assets $
112,340,126 $ 113,530,851
Liabilities Current
liabilities $ 24,279,999 $ 28,343,456 Long-term liabilities
10,469,525 11,107,228
Total liabilities 34,749,524
39,450,684
Total stockholders' equity 77,590,602
74,080,167
Total liabilities and stockholders' equity
$ 112,340,126 $ 113,530,851
Supreme Industries, Inc.Investor and Media Contact:Matthew J.
Dennis, CFA, 574-228-4130Investor Relations
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