Supreme Industries Reports Second-Quarter 2013 Earnings

  Supreme Industries Reports Second-Quarter 2013 Earnings

        Quarterly Gross Margin Expands 1.8 Percentage Points to 17.8%

 First-Half Pre-tax Income, Excluding Unusual Item, Grows to $8.4 Million vs.
                           $7.7 Million a Year Ago

Business Wire

GOSHEN, Ind. -- July 25, 2013

Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of
specialized commercial vehicles including truck bodies, shuttle buses, and
armored vehicles, today announced earnings for its second quarter ended June
29, 2013. All earnings per share and share figures have been adjusted for the
5% stock dividend paid in the second quarter of 2013.

2013 Second-Quarter Results

Consolidated net sales of $76.5 million for the second quarter declined 9.5%
compared with $84.6 million last year. The revenue decrease was attributable
to lower sales volume with bus and fleet truck customers versus the prior
year, partially offset by higher sales of retail trucks.

Gross margin as a percentage of sales improved to 17.8%, or $13.6 million,
compared with 16.0%, or $13.5 million, in the second quarter of 2012, and
sequentially from 17.3%, or $11.4 million, in the first quarter of 2013 due to
improved product mix and manufacturing efficiencies.

During the quarter, Supreme settled its King County, Washington, lawsuit,
which resulted in a $3.4 million pre-tax charge. The legal settlement and
related costs totaled $4.5 million, partially offset by $1.1 million of
estimated value assigned to the returned product. Due to the inherent risk of
litigation and the uncertainty of the outcome, the Company determined that it
was in its best interest to bring this matter to resolution and therefore
agreed to a settlement.

Income tax expense of $0.4 million was recorded in the quarter due to the
Company’s return to normalized statutory rates. In 2012’s comparable period,
the Company recorded an income tax benefit of $0.3 million resulting from the
reversal of a deferred tax valuation allowance due to the improved
profitability.

Net income for the second quarter was $0.9 million, or $0.06 per diluted
share, compared with net income of $5.4 million, or $0.33 per diluted share,
last year. On a proforma basis, diluted earnings per share, adjusting for the
legal settlement costs and normalizing of the 2012 income tax expense,
resulted in $0.20 per diluted share for the second quarter of 2013 compared
with $0.21 per diluted share a year ago.

Supreme’s President and Chief Executive Officer Mark Weber stated, “We are
continuing to drive margin growth through process improvement, enhanced
manufacturing efficiencies and strategic purchasing. Our strategy is to
complement these successes with a customer-centric marketing strategy designed
to grow sales volume and further lever the improvements we’ve made on the cost
side of the business.”

2013 First-Half Results

In the first half of 2013, consolidated net sales decreased 9.1%, to $142.4
million, from $156.7 million last year. Gross profit, as a percentage of
sales, increased more than 200 basis points to 17.6%, compared with 15.5% in
2012. Gross profit improved to $25.0 million, from $24.3 million in last
year’s comparable period. The Company reported pre-tax income, excluding the
impact of the legal settlement, for the first six months of 2013 of $8.4
million compared with $7.7 million a year ago.

Income tax expense increased by $1.9 million versus the first half of 2012
resulting from the normalized tax rates and last year’s reversal of the
valuation allowance in 2012.

Net income for the first six months was $3.2 million, or $0.20 per diluted
share, compared with $7.9 million, or $0.49 per diluted share, last year. On a
proforma basis, diluted earnings per share, adjusting for the legal settlement
costs and normalizing of the 2012 income tax expense, resulted in $0.35 per
diluted share for the first half of this year compared with $0.32 per diluted
share last year.

“We experienced increased sales of retail trucks in the first half of the
year,” Weber said, “which helped to offset the lower fleet truck sales.
Subsequent to the end of the quarter, key fleet operators have placed orders,
which bodes well for 2013’s second half.”

Working capital was $37.8 million at June 29, 2013, compared with $38.6
million at Dec. 29, 2012. Total debt declined to $12.2 million at quarter end
versus $14.1 million at Dec. 29, 2012, and $21.2 million a year ago.
Stockholders’ equity increased to $70.7 million at June 29, 2013, compared
with $67.2 million at Dec. 29, 2012. Book value on a per-share basis was $4.38
at quarter end versus $4.20 at the end of last year. Net cash provided by
operating activities during the first half of 2013 was $4.5 million, reversing
the $2.2 million of net cash used in operations in 2012.

Weber concluded, “Since joining Supreme in May, I have had the opportunity to
visit each of our facilities and a number of customers. I am impressed by the
talented people working throughout this organization and their genuine
dedication to producing the highest-quality products. In addition, our
customers appreciate the value and reliability that Supreme delivers,
reinforcing the numerous opportunities that exist for growing the business and
enhancing shareholder value.”

Conference Call Information

A conference call will be held tomorrow, July 26, 2013, at 9 a.m. ET to review
the second-quarter and first-half results. To participate in the live call,
dial 877-300-8521 (International: 412-317-6026) 10 minutes before the call
begins, or 8:50 a.m. ET. The conference ID is 10031829. 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              Six Months Ended
                 June 29,        June 30,       June 29,         June 30,
                 2013             2012           2013              2012
Net Sales        $ 76,547,227     $              $ 142,428,118     $ 156,740,862
                                  84,574,041
Cost of sales     62,943,120    71,059,856     117,415,910     132,410,960 
Gross profit       13,604,107     13,514,185       25,012,208        24,329,902
                                                                   
Selling,
general and        8,759,419      8,112,242        17,152,665        16,660,632
administrative
expenses
Legal
settlement and     3,417,647      127,000          3,600,161         127,000
related costs
Other income      (19,390    )   (113,192   )    (732,781    )    (592,140    )
Operating          1,446,431      5,388,135        4,992,163         8,134,410
income
                                                                   
Interest          79,073        315,061        221,391         579,810     
expense
Income before      1,367,358      5,073,074        4,770,772         7,554,600
income taxes
                                                                   
Income tax
expense           442,227       (324,317   )    1,541,835       (324,317    )
(benefit)*
Net income       $ 925,131       $             $ 3,228,937      $ 7,878,917   
                                  5,397,391
                                                                   
Income per
share:
Basic            $ 0.06           $ 0.34         $ 0.20            $ 0.49
Diluted            0.06           0.33             0.20              0.49
Shares used in
the
computation of
income per
share:
(Adjusted for
5% stock
dividend paid
on June 3,
2013)
Basic              16,098,387     15,951,777       16,053,098        15,935,492
Diluted            16,462,115     16,240,047       16,356,692        16,212,497
                                                                   

* The Company reported a tax benefit in the second quarter of 2012, resulting
from the utilization of previously unrecognized net operating loss
carryforwards.

Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
                                                          
                                             June 29,        December 29,
                                             2013            2012
                                                             
Assets
Current assets                               $ 68,771,871    $ 61,007,286
Property, plant and equipment, net             44,852,265      42,937,988
Other assets                                  1,366,306      1,142,809
Total assets                                 $ 114,990,442   $ 105,088,083
                                                             
Liabilities
Current liabilities                          $ 30,966,100    $ 22,363,408
Long-term liabilities                         13,335,629     15,561,793
Total liabilities                              44,301,729      37,925,201
Total stockholders' equity                    70,688,713     67,162,882
Total liabilities and stockholders' equity   $ 114,990,442   $ 105,088,083
                                                               

Supreme Industries, Inc. and Subsidiaries
Reconciliation of Net Income and Net Income Per Share
                                                           
                 Three Months Ended              Six Months Ended
                 June 29,       June 30,         June 29,       June 30,
                 2013           2012             2013           2012
                                                                             
Net income       $ 925,131      $ 5,397,391      $ 3,228,937    $ 7,878,917
Legal
settlement and     2,312,321    85,979       *     2,436,648    85,979       *
related costs,
net of tax
Adjusted
income tax        -             (1,962,920 )    -             (2,764,453 )
expense**
Adjusted net     $ 3,237,452    $ 3,520,450      $ 5,665,585    $ 5,200,443
income
                                                                             
                                                                             
Per-share Data
                                                                             
Net Income:
Basic            $ 0.06         $ 0.34           $ 0.20         $ 0.49
Diluted            0.06           0.33             0.20           0.49
Legal
settlement and
related costs,
net of tax:
Basic              0.14           0.01             0.15           0.01
Diluted            0.14           0.01             0.15           0.01
Adjusted
income tax
expense:**
Basic              -              (0.13      )     -              (0.18      )
Diluted           -             (0.13      )    -             (0.18      )
Adjusted net
income:
Basic            $ 0.20         $ 0.22           $ 0.35         $ 0.32
Diluted            0.20           0.21             0.35           0.32
                                                                             
* Represents proforma tax effected legal costs of $127,000 at 32.3%.
** 2012 proforma income tax expense adjusted to 2013’s normalized statutory
rates of 32.3%.
                                                                             
Shares used in
the
computation of
income per
share:
(Adjusted for
5% stock
dividend paid
on June 3,
2013)
Basic              16,098,387     15,951,777       16,053,098     15,935,492
Diluted            16,462,115     16,240,047       16,356,692     16,212,497

Contact:

Investor and Media Contact:
Supreme Investor Relations
Matthew J. Dennis, CFA, 574-228-4130
 
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