Supreme Industries Reports Significantly Improved 2012 Earnings Full-Year Net Income Surges to $11.8 Million from $0.8 Million in 2011 Net Income per Diluted Share Increases to $0.77 from $0.05 in Prior Year Business Wire GOSHEN, Ind. -- February 7, 2013 Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of specialized commercial vehicles including truck bodies, shuttle buses, and armored vehicles, today announced significantly improved earnings for its full year ended Dec. 29, 2012. 2012 Fourth-Quarter Results Consolidated net sales of $57.7 million for the fourth quarter declined 11.8% from $65.5 million in last year’s comparable period. The lower sales related to two large orders in the fourth quarter of 2011 that were not repeated in 2012, along with intense competition and increased discounting in the bus industry on state and municipal bid orders. Gross margin as a percentage of sales declined slightly to 13.2%, compared with 13.4% in last year’s fourth quarter. Gross profit declined to $7.6 million from last year’s $8.7 million on the lower sales volume and a change in product mix. Other income increased $0.2 million due to a gain on sale of an investment. For the quarter, the Company reported net income of $0.4 million, or $0.02 per diluted share, compared with net income of $1.9 million, or $0.12 per diluted share, in the fourth quarter of 2011. Supreme’s Chief Financial Officer and Interim Chief Executive Officer Matthew Long said: “We continue to successfully implement the strategy of concentrating on sales and markets that meet or exceed our margin criteria. By enhancing manufacturing efficiencies and better managing costs, we have successfully developed a model that can drive sustainable profits into the future. Entering 2013, we are encouraged by our team’s progress to date, and by the opportunities we see before us to continue satisfying our customers with on-time delivery of specialty vehicles that represent the very best quality, safety and value.” 2012 Full-Year Results Consolidated net sales decreased 4.7%, to $286.1 million, from $300.4 million last year. Gross profit increased 33.9%, to $43.5 million, from 2011’s $32.5 million. Gross profit, as a percentage of sales, improved dramatically to 15.2%, compared with 10.8% in 2011. The 4.4% increase in gross margin percentage is the result of refined pricing methodologies, improved labor efficiencies and the redesign of certain manufacturing facilities. The Company reported full-year income from continuing operations of $11.8 million, or $0.77 per diluted share, compared with last year’s income from continuing operations of $1.7 million, or $0.11 per diluted share. Net income for the full year improved to $11.8 million, or $0.77 per diluted share, compared with net income of $0.8 million, or $0.05 per diluted share in 2011, which included the impact from discontinued operations. The Company’s effective tax rate was 5.9% for the year ending Dec. 29, 2012, substantially lower than statutory rates due to the reversal of deferred tax asset reserves and the use of net operating loss carryforwards. Reported financial results in 2011 included an income tax benefit of $0.4 million recorded in the fourth quarter, resulting from expiring state statues related to uncertain tax positions. Beginning with the first quarter of 2013, the Company expects to recognize income taxes at more normalized rates. Working capital was $38.6 million at Dec. 29, 2012, up from $35.4 million at Dec. 31, 2011. The working capital ratio was 2.7 to 1 versus 2.0 to 1 for the respective periods. During 2012, Supreme invested $7.1 million in facilities and equipment to enhance efficiencies and $6.1 million to exercise two related-party lease purchase options. On Dec. 19, 2012, the Company entered into a five-year revised cash flow credit agreement increasing its line of credit to $45 million with improved liquidity, availability and interest rate pricing. Total debt declined to $14.1 million at year end, compared with $15.9 million last year. Stockholders’ equity increased 22% to $67.2 million, or $4.41 per share, at Dec. 29, 2012, compared with $54.9 million, or $3.71 per share, at Dec. 31, 2011. Net cash provided by operating activities during 2012 totaled $12.4 million, compared with $14.5 million in 2011. As disclosed in the second quarter of 2012, the Company self-identified an immaterial error related to revenue recognition. Accordingly, its consolidated financial statements reflect the correction of the immaterial error. Conference Call Information A conference call will be held tomorrow, Feb. 8, 2013, at 9 a.m. ET to review the fourth-quarter and full-year results. To participate in the live call, dial 877-317-6789 (International: 412-317-6789) 10 minutes before the call begins, or 8:50 a.m. ET. The conference ID is 10024460. The call also will be streamed live and can be accessed at http://www.SupremeInd.com. Those unable to participate in the live conference call may access a replay, which will be available on Supreme’s website for approximately 30 days. To be added to Supreme Industries’ email distribution list, please click on the link below: http://www.clearperspectivegroup.com/clearsite/sts/emailoptin.html. About Supreme Industries Supreme Industries, Inc. (NYSE MKT: STS), is a nationwide manufacturer of specialized truck bodies produced to the specifications of its customers. Supreme also manufactures special-purpose “shuttle-type” buses and armored vehicles. The Company's transportation equipment products are used by a wide variety of industrial, commercial and law enforcement customers. News releases and other information on the Company are available on the Internet at: http://www.supremeind.com or http://www.b2i.us/irpass.asp?BzID=1482&to=ea&s=0 Other than historical facts contained herein, the matters set forth in this news release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, and reflect the view of management with respect to future events. When used in this report, words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and similar expressions, as they relate to Supreme or its plans or operations, identify forward-looking statements. Such forward-looking statements are based on assumptions made by, and information currently available to, management. 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 it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, an economic slowdown in the specialized vehicle industry, limitations on the availability of chassis on which Supreme’s product is dependent, availability of raw materials, raw material cost increases and severe interest rate increases. Furthermore, Supreme can provide no assurance that any raw material cost increases can be passed on to its customers through implementation of price increases for Supreme’s products. The forward-looking statements contained herein reflect the current view of management with respect to future events and are subject to those factors and other risks, uncertainties and assumptions relating to the operations, results of operations, cash flows and financial position of Supreme. Supreme assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those contemplated by such forward-looking statements. —FINANCIAL RESULTS FOLLOW— Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Income Three Months Ended Twelve Months Ended December 29, December 31, December 29, December 31, 2012 2011 2012 2011 Net sales $ 57,728,124 $ 65,457,410 $ 286,140,112 $ 300,360,689 Cost of sales 50,135,847 56,715,558 242,644,088 267,865,675 Gross profit 7,592,277 8,741,852 43,496,024 32,495,014 Selling, general and 7,532,520 7,025,316 32,219,058 27,653,505 administrative expenses Legal settlement and - - - 2,182,091 related costs Other income (450,472 ) (228,575 ) (1,217,057 ) (850,420 ) Operating 510,229 1,945,111 12,494,023 3,509,838 income Interest 241,705 301,033 971,225 2,243,249 expense Income from continuing operations 268,524 1,644,078 11,522,798 1,266,589 before income tax Income tax (115,056 ) (401,000 ) (310,190 ) (401,000 ) benefit Income from continuing 383,580 2,045,078 11,832,988 1,667,589 operations Discontinued operations Operating loss of discontinued - (159,091 ) - (876,920 ) Oregon operations Net income $ 383,580 $ 1,885,987 $ 11,832,988 $ 790,669 Basic income (loss) per share: Income from continuing $ 0.03 $ 0.13 $ 0.78 $ 0.11 operations Loss from discontinued - (0.01 ) - (0.06 ) operations Net income per $ 0.03 $ 0.12 $ 0.78 $ 0.05 basic share Diluted income (loss) per share: Income from continuing $ 0.02 $ 0.13 $ 0.77 $ 0.11 operations Loss from discontinued - (0.01 ) - (0.06 ) operations Net income per $ 0.02 $ 0.12 $ 0.77 $ 0.05 diluted share Shares used in the computation of income (loss) per share: Basic 15,219,856 15,159,910 15,194,823 14,808,171 Diluted 15,447,552 15,266,155 15,440,484 15,030,772 Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets December 29, December 31, 2012 2011 Assets Current assets $ 61,007,286 $ 69,509,587 Property, plant and 42,937,988 33,530,057 equipment, net Other assets 1,142,809 1,683,718 Total assets $ 105,088,083 $ 104,723,362 Liabilities Current $ 22,363,408 $ 34,087,548 liabilities Long-term 15,561,793 15,702,467 liabilities Total 37,925,201 49,790,015 liabilities Total stockholders' 67,162,882 54,933,347 equity Total liabilities and $ 105,088,083 $ 104,723,362 stockholders' equity Contact: Supreme Investor Relations Investor and Media Contact Matthew J. Dennis, CFA, 574-228-4130
Supreme Industries Reports Significantly Improved 2012 Earnings
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