Supreme Industries Reports Third-Quarter Earnings
30 October 2000
Supreme Industries Reports Third-Quarter Earnings
GOSHEN, Ind.--Oct. 30, 2000--Supreme Industries, Inc., (AMEX:STS) a leading manufacturer of specialized vehicles including truck bodies and shuttle buses, today announced earnings for its third quarter, which ended September 30, 2000.Due to the unusual shipment pattern of orders to the Company's fleet customers, revenues declined to $54.0 million in the third quarter of 2000 from $67.0 million reported for the third quarter of last year. Net earnings were $1.2 million, or $0.11 per diluted share, compared to net earnings of $2.9 million, or $0.26 per share, last year. Last year's third quarter earnings results were abnormally high because they included $10 million in revenues related to the unusual shipment pattern. The fleet customers' products were delivered during the second quarter and third quarter of last year, but this year the fleet customers' orders were substantially complete in the second quarter.
Gross margin for the quarter declined slightly to 16.7 percent from 17.3 percent last year. Pretax operating margin for the quarter declined to 3.6 percent from 7.4 percent last year. The margin decline resulted from an increase in selling, general and administrative expenses on a significantly lower revenue level. This increase related principally to costs associated with installation of the Company's management information system, including consulting fees, added support staff, and related depreciation expense.
Mr. Omer Kropf, President of Supreme Corporation, Supreme Industries' operating subsidiary, stated, "We predicted in our second-quarter press release that the third-quarter comparison would be challenging, because the unusual shipment pattern from our fleet customers in 1999 made last year's third quarter particularly strong. It appears that customer concern over the direction of the economy and rising fuel costs are currently slowing demand for our products."
For the first nine months of 2000, revenues increased 2 percent to $193.8 million from $189.9 million for the same period of 1999. Net income for the nine-month period was down 25 percent to $6.2 million, or $0.55 per diluted share, from $8.2 million, or $0.66 per share, for the corresponding period last year. Gross profit margin for the nine-month period declined to 16.7% from 16.8% last year. Pretax operating margin for the nine-month period declined to 5.3 percent from 7.2 percent last year.
"Our backlog at the end of September declined slightly to $61.9 million from $63.4 at the end of June, and the new order rate also slipped to $52.5 million from $54.7 million in the second quarter," Mr. Kropf said. "Although it is too early in the fleet ordering process, we believe that the anticipated slowing in the general economy may have an influence on the volume of new orders from our fleet customers. Both product demand and backlog indicate that revenues for 2000 should be equal to or slightly above 1999's record $246 million."
"Our recent investment in information technology was necessary to improve our operating efficiency," Mr. Krop said. "The system will provide the detail necessary to improve product cost tracking and inventory management and will greatly enhance our management decision making process, which will help us become a much more efficient manufacturer."
The Company continues to generate strong cash flow, and the balance sheet improved in the third quarter. At September 30, 2000, long-term debt declined to $27.6 million from $35.3 million at December 31, 1999, and stockholders' equity was $49.5 million. The Company has purchased 286,000 shares of its stock so far this year and plans to continue purchasing shares under the existing program that authorizes the purchase of up to 500,000 shares.
Supreme Industries, Inc., and Subsidiaries
Consolidated Statements of Income
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
----------------------------------------------------
Revenues $54,008,406 $67,013,683 $193,772,362 $189,875,331
Costs and expenses:
Cost of sales 44,988,982 55,397,138 161,384,855 157,886,268
Selling, general
and
administrative 6,319,054 5,895,528 19,687,175 16,613,680
Interest 752,483 769,230 2,414,410 1,707,852
------------ ------------ ------------ ------------
52,060,520 62,061,896 183,486,440 176,207,800
------------ ------------ ------------ ------------
Income before
income taxes 1,947,886 4,951,787 10,285,922 13,667,531
Income taxes 776,000 2,022,000 4,129,000 5,497,000
------------ ------------ ------------ ------------
Net income $ 1,171,886 $ 2,929,787 $ 6,156,922 $ 8,170,531
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(1)Earnings Per Share
Basic $0.11 $0.26 $0.55 $0.67
Diluted $0.11 $0.26 $0.55 $0.66
(1)Shares used in the computation of earnings per share:
Basic 11,105,846 11,398,191 11,187,470 12,268,745
Diluted 11,105,846 11,431,744 11,191,361 12,335,458
(1) 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,
2000 1999
------------- -------------
Assets
Current assets $58,864,329 $70,939,324
Property, plant and equipment, net 41,376,769 37,464,092
Intangible assets, net 1,146,284 1,298,766
Other assets 823,916 880,246
------------- -------------
Total assets $102,211,298 $110,582,428
------------- -------------
------------- -------------
Liabilities and Stockholders' Equity
Current liabilities $ 22,987,365 $28,285,547
Long-term debt 27,570,076 35,319,246
Deferred income taxes 2,128,452 2,128,452
------------- -------------
Total liabilities 52,685,893 65,733,245
Total stockholders' equity 49,525,405 44,849,183
------------- -------------
Total liabilities and stockholders'
equity $102,211,298 $110,582,428
------------- -------------
------------- -------------