Supreme Industries Predicts Higher Year Earnings While Revising Q2 Outlook

30 June 1999

Supreme Industries Predicts Higher Year Earnings While Revising Second-Quarter Outlook

    GOSHEN, Ind.--June 29, 1999--Supreme Industries, Inc., (AMEX:STS) a leading manufacturer of specialized truck bodies and shuttle buses, today announced that higher labor costs, among other factors, would cause its second-quarter earnings per share, when announced in the last week of July, to be reported below analysts' estimates. However, the Company continues to anticipate, though there can be no assurance, that its earnings per share for 1999 will exceed the $0.89 reported in 1998.
    Omer Kropf, President of Supreme Corporation, Supreme Industries' operating subsidiary stated, "The tightening labor market, particularly in Indiana, has forced our direct and indirect labor costs higher. Various factors associated with these labor costs, in addition to late chassis deliveries and specification changes on some of the larger fleet orders, have caused delays in shipments. We will be considering various pricing strategies to strengthen our margins and partially offset these higher costs. Second-quarter earnings should be in the range of 24 to 26 cents per share, as compared with 30 cents for the same period last year. We also expect nearly $10 million in delayed orders to be shipped in the third quarter."
    "Overall, our business outlook is very strong," Mr. Kropf said. "Our backlog at the end of May was a healthy $67.9 million, about 40 percent higher than it was last year at this time. Customer orders were 16 percent higher in May this year and are continuing strong in June. The strong backlog and order flow should translate into double-digit revenue growth over the next several quarters. With these favorable underlying factors, we are well positioned this year to exceed last year's earnings."
    "Our continuous-feed fiberglass-reinforced plywood (FRP) operations continue to become more efficient," Mr. Kropf noted. "We are currently running three shifts and producing product at 4.5 feet per minute. All paneling produced by the facility is being consumed internally for fleet orders and van, Iner-City(R), and Spartan(R) product lines. By the end of the third quarter, we plan to have excess production capacity for making laminated product for a growing list of interested external customers."
    "In the `Dutch Auction' that closed on May 10, 1999, we purchased 1.7 million of our common shares at $10.00 per share," Mr. Kropf added. "We believe this was an excellent investment that will have positive earnings per share implications."
    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 press release contains forward-looking statements, other than historical facts, that 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.