Supreme Industries Reports Improved Earnings and Revenues and Increases Cash Dividend
GOSHEN, Ind.--May 4, 2004--| Revenues Increased 47.6 Percent and Diluted Earnings Per Share Increased 167 Percent over Q1 2003 |
Supreme Industries, Inc. -- (AMEX:STS), a leading manufacturer of specialized vehicles including truck bodies and shuttle buses, today announced financial results for the 2004 first-quarter period ended March 27, 2004.
Improving economic conditions in the commercial truck and transportation industries and the subsequent increase in both capital goods orders and spending produced higher revenues and earnings in the first quarter of 2004. The Company recorded revenues of $73.6 million for the quarter ended March 27, 2004, compared to $49.8 million for the same period last year, an increase of $23.8 million.
Net income for the first quarter of 2004 was $1.0 million, or $0.08 per diluted share, compared to $.4 million, or $0.03 per diluted share, in the first quarter of 2003. Gross profit as a percentage of revenues was 9.8 percent for the three months ended March 27, 2004, a decrease of 2.1 percentage points from the 11.9 percent for the three months ended March 29, 2003. Several factors contributed to the decline in gross profit. First, major commodities used by the Company including steel, wood and aluminum and other related material expense items experienced considerable escalating prices throughout the first quarter. The increased material cost was partially offset by improved overhead absorption resulting from the increased revenues. Second, the gross profit margin was adversely affected by the large percentage of revenues attributable to lower margin fleet business invoiced in the current quarter compared with the first quarter of 2003. These fleet agreements did not generally have material cost escalation provisions. Finally, the Company incurred in excess of $500,000 of start-up related expenses at its newly opened Oregon facility.
As a result of the escalated costs, the Company implemented across-the-board cumulative increases in its selling prices of 7 percent. The benefit of these price increases will not be reflected in the Company's revenues until the latter part of the second quarter due to the Company's significant backlog existing prior to the effectiveness of such increases. Consequently, although the Company can not provide any assurance, material cost as a percentage of revenues is anticipated to return to a level more consistent with historical operations beginning in June.
Interest expense declined 16.8 percent from $.23 million in the first quarter of 2003 to $.19 million in the same period of 2004. Selling, general and administrative (SG&A) expenses fell as a percent of sales from 10.1 percent in the 2003 period to 7.4 percent in the 2004 period. This decline primarily relates to increased revenues in the quarter ended March 27, 2004.
Compared with the prior-year first quarter, stockholders' equity improved 9.1 percent to $64.7 million. Working capital increased to $55.4 million to support the Company's record backlog of $87.6 million as of March 27, 2004. The Company continues to aggressively manage its working capital assets.
Omer Kropf, president of Supreme Corporation, Supreme Industries' operating subsidiary, stated, "Strong order intake, a record backlog, a low interest rate environment, an aging fleet and low inventory levels in our distribution channels all bode well for improved revenues through the first half of 2004."
Mr. Kropf concluded, "Our nationwide sales distribution and service, long-standing reputation for the highest quality, reliability, and value, and ability to build to customer specifications at a competitive price are among key factors earning Supreme a leading position in the truck body industry."
As previously announced, Supreme's board of directors approved an increased quarterly cash dividend of $0.035 on its outstanding Class A and Class B Common Stock to be paid on May 1, 20047, 2004. This cash dividend is the third consecutive quarterly cash dividend in what the Company intends to be a continuing series of quarterly cash dividends, business conditions permitting.
A live webcast of Supreme Industries' earnings conference call can be heard today at 4:30 p.m. Eastern Time at www.supremeind.com.
Supreme Industries, Inc. is a nationwide manufacturer of specialized truck bodies that are produced to the specifications of its customers. Supreme also manufactures the StarTrans(R) line of special-purpose "shuttle-type" buses. The Company's transportation equipment products are used by a wide variety of industrial and commercial customers.
This report contains forward-looking statements, other than historical facts, that reflect the views of Company management with respect to future events. When used in this report, words such as "believe," "expect," "anticipate," "estimate," "intend" and similar expressions, as they relate to the Company or its plans or operations, identify forward-looking statements. Such forward-looking statements are based on assumptions made by, and information currently available to, the Company's management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations are reasonable, and it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, limitations on the availability of chassis on which the Company's product is dependent, availability of raw materials and severe interest rate increases. The forward-looking statements contained herein reflect the current views of Company 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 the Company. The Company 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 Tables Follow...
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
Three Months Ended
-------------------------
March 27, March 29,
2004 2003
------------ ------------
Revenues $73,564,467 $49,824,210
Costs and expenses:
Cost of sales 66,330,489 43,896,932
Selling, general and administrative 5,439,294 5,016,071
Interest 191,915 230,786
------------ ------------
71,961,698 49,143,789
------------ ------------
Income before income taxes 1,602,769 680,421
Income taxes 613,000 262,000
------------ ------------
Net income $989,769 $418,421
============ ============
Earnings per share (a) :
Basic $.08 $.04
Diluted .08 .03
Shares used in the computation of earnings
per share (a) :
Basic 12,030,316 11,914,466
Diluted 12,485,701 12,016,912
(a) 2003 share and per share data have been adjusted for a ten
percent stock dividend paid in October 2003.
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
March 27, December 27,
2004 2003
------------- -------------
Assets
Current assets $84,386,458 $65,929,916
Property, plant and equipment, net 37,695,701 37,444,901
Intangible assets, net 803,737 816,622
Other assets 2,449,322 2,459,841
------------- -------------
Total assets $125,335,218 $106,651,280
============= =============
Liabilities
Current liabilities $28,996,495 $22,432,059
Long-term debt 28,491,477 17,366,609
Deferred income taxes 3,188,576 3,180,453
Other long-term liabilities 7,816 29,190
------------- -------------
Total liabilities 60,684,364 43,008,311
Total stockholders' equity 64,650,854 63,642,969
------------- -------------
Total liabilities and stockholders' equity $125,335,218 $106,651,280
============= =============