Supreme Industries Reports Improved Earnings and Revenues for the Second-Quarter
GOSHEN, Ind.--July 28, 2005--Supreme Industries, Inc. (AMEX:STS):-- Quarterly revenues increased 5% to record $95.4 million
-- EPS in the quarter increased 53%
-- Order backlog remains strong at $72.6 million
-- Supreme joins Russell Microcap(TM) Index
Supreme Industries, Inc. -- (AMEX:STS), a leading manufacturer of specialized vehicles including truck bodies and shuttle buses, today announced improved financial results for the 2005 second quarter and six-month periods ended June 25, 2005, over the same periods of last year.
Strong volume with the Company's larger fleet and leasing customers produced higher revenues and earnings in the second quarter and first six months of 2005. The Company recorded revenues of $95.4 million for the second quarter of 2005, compared to $90.9 million for the same period last year, an increase of $4.5 million or 5 percent. Revenues in the first six months improved $21.4 million, or 13 percent, to $185.8 million in the 2005 period from $164.4 in the 2004 period.
Net income for the second quarter was $2.9 million, or $0.23 per diluted share, in 2005 compared to $1.9 million, or $0.15 per diluted share, in 2004, and for the first six months was $6.0 million, or $0.47 per diluted share, for the 2005 period and $2.9 million, or $0.23 per diluted share, in the 2004 period.
Gross profit as a percentage of net sales increased in both the quarter and six-month period, primarily as a result of the price increases the Company implemented throughout 2004 and 2005, as well as cost stabilization for the majority of the raw materials used in the production of Supreme's products. The increase in gross profit would have been greater if not for an escalation in group health insurance claims in 2005, particularly in the second quarter. These costs increased by $561 thousand and $738 thousand for the three and six month periods ended June 25, 2005 compared to the corresponding periods in 2004. A combination of increased number and severity of claims resulted in these higher costs.
Selling, general and administrative expenses increased as a percent of net sales from 7.1 percent in the 2004 second quarter to 7.7 percent in the 2005 second quarter, and from 7.3 percent in the first six months of 2004 to 7.4 percent in the same period of 2005. Selling expenses increased due to a reduction in cooperative marketing funds received from chassis manufacturers in the first six months of 2005 versus the same period last year. Additionally, the Company experienced higher sales commission expense as a result of additional revenues and higher compensation expense related to the Company's incentive bonus plans.
Interest expense increased from $216 thousand in the second quarter of 2004 to $568 thousand in the same period of 2005. For the first six months, interest expense increased from $408 thousand in 2004 to $1.1 million in 2005. The increase in interest expense for both periods is a result of increased debt incurred principally for increased working capital and higher short-term interest rates in 2005 versus 2004.
Stockholders' equity improved to $73.0 million and working capital increased to $55.3 million; the Company continues to aggressively manage its working capital assets. Backlog was $72.6 million as of June 25, 2005.
Robert W. Wilson, Executive Vice President, stated, "The Company experienced increased revenues of $21.4 million for the first half of 2005. The increased revenues were a result of the price increases the Company implemented throughout 2004 and 2005 as well as an increase in unit shipments. Additionally, we are pleased that the Company's gross margin of 12.9% for the first half of 2005 exceeded not only the 10.2% reported in the same period of 2004, but also our 2005 gross margin goal of 12%."
Wilson concluded, "While the competitive landscape remains challenging, we are optimistic given the continued strength of our backlog and our strong positioning within the truck and bus markets. Finally, we are excited to report that Supreme Industries has been included in the Russell Microcap(TM) Index, which represents the smallest 1000 members of the Russell 2000 and the next 1000 stocks by market capitalization. Supreme's inclusion in this index should assist in increasing the Company's visibility with investors and institutions that rely on the Russell indexes as part of their investment strategy."
As announced on June 6, 2005, Supreme's board of directors approved a $0.095 per share cash dividend on its outstanding Class A and Class B Common Stock to be paid on August 1, 2005 to shareholders of record on July 25, 2005. This cash dividend is the eighth consecutive quarterly cash dividend in what the Company intends to be a continuing series of quarterly cash dividends, business conditions permitting.
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.
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended
--------------------------- ---------------------------
June 25, June 26, June 25, June 26,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Revenue:
Net sales $95,216,407 $90,740,648 $185,538,711 $164,221,753
Other income 138,914 105,297 300,218 188,659
------------- ------------- ------------- -------------
95,355,321 90,845,945 185,838,929 164,410,412
------------- ------------- ------------- -------------
Costs and
expenses:
Cost of
sales 82,970,295 81,125,598 161,666,831 147,456,087
Selling,
general and
admini-
strative 7,294,334 6,461,329 13,752,416 11,900,623
Interest 568,387 216,271 1,057,033 408,186
------------- ------------- ------------- -------------
90,833,016 87,803,198 176,476,280 159,764,896
------------- ------------- ------------- -------------
Income before
income taxes 4,522,305 3,042,747 9,362,649 4,645,516
Income taxes 1,622,000 1,155,000 3,368,000 1,768,000
------------- ------------- ------------- -------------
Net income $2,900,305 $1,887,747 $5,994,649 $2,877,516
============= ============= ============= =============
Earnings per share:
Basic $.23 $.16 $.49 $.24
Diluted .23 .15 .47 .23
Shares used in the
computation of
earnings per share:
Basic 12,391,341 12,086,558 12,288,776 12,058,437
Diluted 12,708,871 12,504,790 12,651,893 12,497,473
Cash dividends
per share: $.035 $.035 $.07 $.065
Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets
June 25, December 25,
2005 2004
(Unaudited) (Audited)
-------------- --------------
Assets
Current assets $78,474,534 $80,680,035
Property, plant and equipment, net 48,026,253 47,190,964
Other assets 1,276,032 1,325,620
-------------- --------------
Total assets $127,776,819 $129,196,619
============== ==============
Liabilities
Current liabilities $23,193,043 $29,781,764
Long-term debt 28,476,053 28,766,667
Deferred income taxes 3,085,179 3,085,179
-------------- --------------
Total liabilities 54,754,275 61,633,610
Total stockholders' equity 73,022,544 67,563,009
-------------- --------------
Total liabilities and stockholders'
equity $127,776,819 $129,196,619
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