Supreme Industries Reports Record Q3 and 9 Month Financial Results
30 October 1998
Supreme Industries Reports Record Third-Quarter and Nine-Month Financial Results
GOSHEN, Ind.--Oct. 29, 1998--Supreme Industries, Inc., (AMEX:STS) a leading manufacturer of specialized truck bodies and shuttle buses, today reported the highest levels of sales and earnings it has ever achieved for a third-quarter or nine-month period.For the third quarter, which ended September 30, 1998, the Company's revenues rose 12.5 percent to $51.4 million from $45.7 million for the same quarter last year. Pretax income increased 3.5 percent to $2.9 million from $2.8 million, while net income for the third quarters of both years was approximately the same at $1.7 million, although earnings per diluted share increased a penny to $0.16 from $0.15 last year.
For the first nine months of 1998, revenues increased 15.1 percent to $168.2 million from $146.1 million for the same period of 1997. Net income for the nine-month period was up 13.0 percent to $7.6 million, or $0.69 per diluted share, from $6.7 million, or $0.61 per diluted share, for the corresponding period last year.
"The Company experienced lower-than-anticipated gross margin at its California plant in the third quarter," commented Omer Kropf, President of Supreme Corporation, Supreme Industries' operating subsidiary. "The California plant is improving and should reach satisfactory levels by year end. Further, the quarter had incremental expenses associated with special projects, including the Honduran wood operations and the cost associated with the discontinuance of the Freedom-One product line. As a result, net income per share only improved one cent in the 1998 third quarter over the prior year's third quarter. Looking ahead, we expect a recent average three percent price increase to yield margin benefits in the latter part of the fourth quarter."
"Although our overall cost of sales was down from last year's level--enabling gross margin to improve to 16.0 percent from 15.4 percent--selling, general, and administrative expenses increased on a comparable basis partially attributable to a total upgrading of the Company's management information systems, which resulted in a pretax margin approximately equivalent to 1997's third-quarter pretax margin. The Company is focusing on reducing its SG&A expenditures to bring them more in line with corporate objectives and anticipates improvement in the fourth quarter."
Mr. Kropf continued, "Order intake continues to be strong and is running more than 12 percent above last year's pace. As a result, the Company's backlog at September 30, 1998, was $52 million, compared with $34 million at the same point last year."
Mr. Kropf concluded, "Quality and production rates continue to rise at our fiberglass-reinforced panel facility. Now that we are producing panels at nearly four and a half feet per minute, this facility is beginning to improve our internal efficiencies and lower our costs. We plan to market the excess capacity to other manufacturers of transportation equipment by the spring of 1999."
Supreme Industries, Inc., is a nationwide manufacturer of specialized truck bodies which 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 press release contains forward-looking statements, other than historical facts, which reflect the view of the Company's management with respect to future events. 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 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 Company assumes no obligation to update the forward-looking statements or to update the reason actual results could differ from those contemplated by such forward-looking statements.
(Table follows)
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
----------- ----------- ------------ ------------
Revenues $51,406,038 $45,691,254 $168,221,575 $146,140,460
Costs and expenses:
Cost of sales 43,165,665 38,648,059 138,891,672 121,564,238
Selling, general
and administrative 4,907,523 3,909,345 15,142,831 12,328,511
Interest 397,766 299,194 1,304,205 1,062,419
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48,470,954 42,856,598 155,338,708 134,955,168
----------- ----------- ------------ ------------
Income before
income taxes 2,935,084 2,834,656 12,882,867 11,185,292
Income taxes 1,222,000 1,134,000 5,291,000 4,468,000
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Net income $ 1,713,084 $ 1,700,656 $ 7,591,867 $ 6,717,292
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(a)Earnings per share:
Basic $.16 $.15 $.69 $.61
Diluted $.16 $.15 $.69 $.61
(a)Shares used in the
computation of
earnings per share:
Basic 10,963,456 10,977,265 10,931,635 10,963,427
Diluted 11,012,390 10,979,086 11,006,851 10,976,347
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, December 31,
1998 1997
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Assets
Current assets $54,896,643 $53,528,995
Property, plant and equipment, net 31,864,714 29,560,441
Intangible assets, net 1,552,903 1,705,385
Other assets 1,023,608 1,079,491
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Total assets $89,337,868 $85,874,312
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----------- -----------
Liabilities and Stockholders' Equity:
Current liabilities $18,738,682 $23,165,040
Long-term debt 17,557,769 17,359,703
Deferred income taxes 898,825 898,825
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Total liabilities 37,195,276 41,423,568
Total stockholders' equity 52,142,592 44,450,744
----------- -----------
Total liabilities and stockholders'
equity $89,337,868 $85,874,312
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(a)Share data and earnings per share for the prior periods have been
restated for the 5% stock dividend declared May 12, 1998.