Supreme Industries Reports Record Q3 and Nine-Month Financial Results
27 October 1999
Supreme Industries Reports Record Third-Quarter and Nine-Month Financial Results
GOSHEN, Ind.--Oct. 27, 1999--Supreme Industries, Inc., (AMEX:STS) a leading manufacturer of specialized vehicles including truck bodies and shuttle buses, today reported the highest levels of sales and earnings it has ever achieved for both the third-quarter and nine-month periods.For the third quarter, which ended September 30, 1999, the Company's revenues rose 30 percent to $67.0 million from $51.4 million for the same quarter last year. Pretax income increased 69 percent to $5.0 million from $3.0 million, while net income rose 71 percent to $2.9 million from $1.7 million. Earnings per diluted share (adjusted for five percent stock dividends paid on July 19, 1999, and November 20, 1998) doubled to $0.28 from $0.14 last year.
"We expected revenues and net income to be particularly strong in the third quarter," said Omer Kropf, President of Supreme Corporation, Supreme Industries' operating subsidiary. "The overall reduction in cost of sales expanded our gross margin to 17.3 percent from 16 percent a year ago and increased gross profit 41 percent. Material and overhead costs decreased as a percentage of sales, while the tight labor market, primarily in Indiana, lead to a slight increase in our labor costs. Although our labor requirements are easing as we enter our off-peak season, we are expecting the labor market to be tight next spring during our peak period for producing fleet orders."
"Interest expense was higher in this year's third quarter reflecting the $17 million we paid to repurchase 1.7 million shares of our stock last May," Mr. Kropf noted.
For the first nine months of 1999, revenues increased 13 percent to $189.9 million from $168.2 million for the same period of 1998. Net income for the nine-month period was up 7.6 percent to $8.2 million, or $0.73 per diluted share, from $7.6 million, or $0.63 per diluted share, for the corresponding period last year, as adjusted for the above-mentioned stock dividends.
"Regarding specific products," Mr. Kropf continued, "our Spartan Service Van continued to gather strength as bookings were up 11 percent in the third quarter. We introduced completed prototypes of our new `EZ Access' and Cutback Cutaway in the third quarter and customer acceptance is quite favorable."
"Our continuous-feed fiberglass-reinforced plywood (FRP) facility is currently operating on a two ten-hour shift basis and producing paneling in the range of 4.5 to 5 feet per minute. We temporarily cut production by 4 hours per day due to an unexpected turnover in a supervisory position. We have been training another supervisor and will resume operating three eight-hour shifts in November, " Mr. Kropf said. "Enhancements are also underway to increase the machine's speed in the first half of next year. The paneling is being used internally for fleet orders, Iner-City(R) and Spartan(R) product lines, and we are beginning to inventory product to meet internal demand for next spring."
"Overall, our business outlook is good," Mr. Kropf said. "The 30 percent increase in shipments to $67 million during third quarter reduced our backlog at the end of September to about $49 million from $52 million at the end of last year's third quarter, while the order intake remained about the same as last year at $56 million. Negotiations with our fleet customers for next year's spring orders are nearly complete and point to a ten percent increase in business. Over the near term, we expect considerable revenue growth and favorable margin comparisons through the fourth quarter and into next year."
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.
(Table follows)
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
------------ ------------ ------------ ------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Revenues $ 67,013,683 $ 51,406,038 $189,875,331 $168,221,575
Costs and expenses:
Cost of sales 55,397,138 43,165,665 157,886,268 138,891,672
Selling,
general and
administrative 5,895,528 4,907,523 16,613,680 15,142,831
Interest 769,230 397,766 1,707,852 1,304,205
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62,061,896 48,470,954 176,207,800 155,338,708
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Income before
income taxes 4,951,787 2,935,084 13,667,531 12,882,867
Income taxes 2,022,000 1,222,000 5,497,000 5,291,000
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Net income $2,929,787 $1,713,084 $8,170,531 $7,591,867
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(a) Earnings per share:
Basic $.28 $.14 $.73 $.63
Diluted $.28 $.14 $.73 $.63
(a) Shares used in the
computation of earnings
per share:
Basic 10,338,495 12,087,210 11,128,113 12,052,128
Diluted 10,368,929 12,140,177 11,188,624 12,134,660
(a) All per share amounts have been restated for all common stock
dividends paid.
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, December 31,
1999 1998
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Assets
Current assets $66,120,447 $60,234,709
Property, plant and equipment, net 35,798,988 31,342,322
Intangible assets, net 1,349,593 1,502,076
Other assets 905,691 991,947
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Total assets $104,174,719 $94,071,054
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Liabilities and Stockholders' Equity:
Current liabilities $27,526,131 $20,948,765
Long-term debt 30,558,208 18,303,207
Deferred income taxes 1,333,007 1,333,007
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Total liabilities 59,417,346 40,584,979
Total stockholders' equity 44,757,373 53,486,075
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Total liabilities and stockholders'
equity $104,174,719 $94,071,054
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