Supreme Industries Reports Improved Revenue and Earnings For 2005 Fourth Quarter and Full Year
GOSHEN, Ind.--Feb. 9, 2006--| Annual Revenue Improved by 11%; EPS for the Year Increased by 71%; Cash Dividend Payout for 2005 Increased by 93% per Share |
Supreme Industries, Inc. -- (AMEX:STS), a leading manufacturer of specialized transportation products, including truck bodies and shuttle buses, announced today financial results for the 2005 fourth quarter and year ended December 31, 2005.
The series of price increases implemented throughout 2004 and the beginning of 2005, coupled with good demand for all of the Company's major product lines, resulted in record revenue in both the fourth quarter and full year of 2005. The Company had net sales of $78.7 million for the quarter ended December 31, 2005, compared to $72.5 million for the quarter ended December 25, 2004. Full-year net sales were $341.3 million in 2005, compared to $307.3 million for the full year of 2004.
Pretax income improved significantly for the fourth quarter of 2005 compared to the fourth quarter of 2004. Pretax income in the fourth quarter of 2005 was $1.3 million compared to $17,061 in the fourth quarter of 2004, and net income for the fourth quarter of 2005 was $1.1 million, or $0.08 per diluted share, compared to $1.0 million, or $0.08 per diluted share, in the fourth quarter of 2004. Net income for the fourth quarter of 2004 was positively impacted by having recognized both research and development tax credits claimed on amended tax filings and the reversal of tax reserves that were no longer required.
Supreme's pretax income for 2005 more than doubled to $12.7 million from $6.1 million in 2004. Supreme's 2005 full-year net income was $8.3 million, or $0.65 per diluted share, compared to $4.7 million, or $0.38 per diluted share, for the same period in 2004.
While selling, general and administrative (SG&A) expenses as a percentage of net sales were unchanged in 2005 from the prior year, SG&A increased in the fourth-quarter of 2005 compared to the same period of 2004, due principally to, among other factors, increased compensation-related costs associated with improved revenue and pretax income.
Interest expense increased from $349,273 in the fourth quarter of 2004 to $561,521 in the same period of 2005. For the twelve-month period, interest expense increased from $1.0 million in 2004 to $2.1 million in 2005. The increase in interest expense for both periods is a result of increased debt incurred for funding of capital expenditures together with increased working capital and higher short-term interest rates in 2005 versus 2004.
Stockholders' equity totaled $75.2 million, or $5.92 per share, at December 31, 2005. Working capital totaled $58.9 million compared with $50.9 million at year-end 2004. The working capital ratio at year end 2005 was 3.1 to 1.0 while long-term debt as a percentage of the Company's total capitalization was a conservative 28.6 percent.
Robert W. Wilson, president and chief operating officer, stated, "We benefited from the price increases implemented in 2004 and the beginning of 2005, and the outcome was reflected in the strong earnings we reported for the full-year period."
Mr. Wilson concluded, "We are pleased that we were able to attain one of our primary financial objectives for 2005, which was to improve our gross margin to 12 percent, two percentage points over the level achieved in 2004. With a backlog of $90.3 million, which is slightly higher than last year's $89.1 million, we are optimistic that 2006 can be another strong year for Supreme, and we have set an internal gross margin target of 13 percent. However, an intensely competitive market environment, less favorable general economic conditions and other factors could adversely impact our results in 2006."
As announced on February 7, 2006, 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 February 27, 2006, to shareholders of record on February 20, 2006. This cash dividend is the tenth 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.
The Company's significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 25, 2004. In Management's opinion, the Company's critical accounting policies include allowance for doubtful accounts, excess and obsolete inventories, inventory relief, accrued insurance and accrued warranty.
This report contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), other than historical facts, which reflect the view of the Company's 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, raw material cost increases, and severe interest rate increases. Furthermore, the Company can provide no assurance that such raw material cost increases can be passed on to its customers through implementation of price increases for the Company's products. The forward-looking statements contained herein reflect the current views of the Company's 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
Three Months Ended Twelve Months Ended
------------------------- ---------------------------
December 31, December 25, December 31, December 25,
2005 2004 2005 2004
------------ ------------ ------------- -------------
Revenue:
Net sales $78,658,767 $72,520,807 $341,252,852 $307,326,310
Other income 274,204 252,765 806,005 636,145
------------ ------------ ------------- -------------
78,932,971 72,773,572 342,058,857 307,962,455
------------ ------------ ------------- -------------
Costs and
expenses:
Cost of sales 69,650,522 66,173,141 300,114,755 276,556,076
Selling,
general and
administrative 7,401,005 6,234,097 27,137,573 24,287,530
Interest 561,521 349,273 2,129,149 1,016,732
------------ ------------ ------------- -------------
77,613,048 72,756,511 329,381,477 301,860,338
------------ ------------ ------------- -------------
Income before
income taxes 1,319,923 17,061 12,677,380 6,102,117
Income taxes 259,000 (961,000) 4,336,000 1,354,000
------------ ------------ ------------- -------------
Net income $1,060,923 $978,061 $8,341,380 $4,748,117
============ ============ ============= =============
Earnings per
share:
Basic $.08 $.08 $.67 $.39
Diluted .08 .08 .65 .38
Shares used in
the computation
of earnings per
share:
Basic 12,667,949 12,118,448 12,455,818 12,083,601
Diluted 12,993,927 12,445,153 12,869,432 12,477,333
Cash dividend per
share $.095 $.035 $.26 $.135
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, December 25,
2005 2004
------------- -------------
Assets
Current assets $86,726,343 $80,680,035
Property, plant and equipment, net 49,334,947 47,190,964
Intangible assets, net 735,014 765,080
Other assets 549,350 560,540
------------- -------------
Total assets $137,345,654 $129,196,619
============= =============
Liabilities
Current liabilities $27,819,756 $29,781,764
Long-term debt 31,378,367 28,766,667
Deferred income taxes 2,988,275 3,085,179
------------- -------------
Total liabilities 62,186,398 61,633,610
Total stockholders' equity 75,159,256 67,563,009
------------- -------------
Total liabilities and stockholders' equity $137,345,654 $129,196,619
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