Supreme Industries Reports Second Quarter Earnings
31 July 2000
Supreme Industries Reports Second Quarter Earnings
GOSHEN, Ind. - Supreme Industries, Inc., a leading manufacturer of specialized vehicles including truck bodies and shuttle buses, today announced earnings for its second quarter ended June 30, 2000.Net earnings were $2.2 million, or $0.20 per share, on revenues of $68.0 million for this year's second quarter. Last year's second quarter net earnings were $2.8 million, or $0.23 per share, on revenues of $66.5 million.
Gross margin for the quarter was approximately the same as the prior year's quarter, but was adversely affected by increases in healthcare and worker's compensation costs. Earnings were also adversely affected by increases in selling, general and administrative expenses, related principally to additional administrative positions, outside services, and higher depreciation associated with the company's new computer system. In addition, debt incurred for stock repurchases resulted in increased interest expense.
For the six-month period ended June 30, 2000, revenues increased 13.8 percent to $139.8 million from $122.9 million for the six-month period ended June 30, 1999. Net earnings for the first half of 2000 declined to $5.0 million from $5.2 million reported for the first six months of 1999. Earnings per share, however, increased to $0.44 from $0.41 because of fewer shares outstanding.
"Earnings results for the quarter were below what had been expected. In addition, we foresee earnings comparisons for the upcoming third quarter to be challenging because of the atypical order cycle from our fleet customers last year," said Omer Kropf, President of Supreme Corporation, Supreme Industries' operating subsidiary. "Deliveries usually made in the first and second quarters were deferred into the third quarter of 1999. This year, major fleet orders returned to a normal cycle and were delivered in the first and second quarters."
"Despite the second quarter results, the Company's business fundamentals remain favorable," Mr. Kropf said. "Both product demand and backlog lead us to believe that revenues for 2000 will be well above 1999's record $246 million, and earnings per share should surpass the $0.68 reported last year. Product demand in our northeast and southeast markets remains strong, while the midwest, south, and western regions are less robust. We are opening two new mounting stations in Ohio to increase sales and strengthen our market presence in the midwest region."
"Although the implementation of our unique lamination technology has been difficult and substantially delayed," Mr. Kropf said, "we are finally in a position to materially benefit from the investment in this technology. Our automated fiberglass-reinforced plywood (FRP) facility in Ligonier, Indiana, recently ran successful tests of faster-drying laminate formulations using a material called Gelcoat, which should result in a net internal material cost that is 20 percent less than comparable outside supplies."
"We have been actively buying back our stock, because we feel it represents exceptional value at current prices," Mr. Kropf added. "The Company has purchased 234,728 shares of stock so far this year and currently has authorization from the Board of Directors to purchase an additional 500,000 shares under the recently announced buy-back program. We will continue to purchase our stock until the market begins to recognize the Company's true value."
Supreme Industries, Inc., is a nationwide manufacturer of specialized vehicles including truck bodies that are produced to the specifications of its customers. Supreme also manufactures the StarTrans 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
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
--------------------------------------------------------
Revenues $67,982,871 $66,485,606 $139,763,956 $122,861,648
Costs and expenses:
Cost of sales 57,193,318 55,654,730 116,395,872 102,489,130
Selling, general
and
administrative 6,365,189 5,563,377 13,368,121 10,718,152
Interest 782,435 599,618 1,661,927 938,622
----------- ----------- ----------- -----------
64,340,942 61,817,727 131,425,920 114,145,904
----------- ----------- ----------- -----------
Income before
income taxes 3,641,929 4,667,879 8,338,036 8,715,744
Income taxes 1,466,000 1,825,000 3,353,000 3,475,000
----------- ----------- ----------- -----------
Net income $ 2,175,929 $ 2,842,879 $ 4,985,036 $ 5,240,744
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(1)Earnings Per Share
Basic $.20 $.23 $.44 $.41
Diluted $.20 $.23 $.44 $.41
(1)Shares used in the
computation of earnings
per share:
Basic 11,156,888 12,195,704 11,228,730 12,711,236
Diluted 11,158,489 12,296,266 11,248,964 12,813,768
(1) All per share amounts have been restated for all common stock
dividends paid.
Supreme Industries, Inc., and Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
2000 1999
---- ----
Assets
Current assets $62,787,580 $70,939,324
Property, plant and equipment,
net 41,533,006 37,464,092
Intangible assets, net 1,197,111 1,298,766
Other assets 841,086 880,246
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Total assets $106,358,783 $110,582,428
------------ ------------
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Liabilities and Stockholders' Equity
Current liabilities $ 22,112,503 $28,285,547
Long-term debt 33,494,519 35,319,246
Deferred income taxes 2,128,452 2,128,452
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Total liabilities 57,735,474 65,733,245
Total stockholders' equity 48,623,309 44,849,183
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Total liabilities and stockholders'
equity $106,358,783 $110,582,428
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