Supreme Industries Reports Fourth-Quarter 2013 Results

  Supreme Industries Reports Fourth-Quarter 2013 Results

               Sales Surge 26% to $72.5 Million in the Quarter

    Quarterly Net Income Grows to $0.10 Per Share Versus $0.02 a Year Ago

Business Wire

GOSHEN, Ind. -- February 13, 2014

Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of
specialized commercial vehicles including truck bodies and specialty vehicles,
today announced financial results for its fourth quarter ended December 28,
2013. All earnings per share and share figures have been adjusted for the 5%
stock dividend distributed in the second quarter of 2013.

2013 Fourth-Quarter Results

Consolidated net sales for the fourth quarter increased 25.6%, to $72.5
million, compared with $57.7 million last year. The revenue increase was
attributable to a fall fleet build and improved retail demand for truck
bodies, partially offset by lower sales volume in the specialty vehicle and
bus divisions.

Gross margin expanded to 15.2% of quarterly sales, compared with 13.2% in last
year’s fourth quarter, despite margin pressure in the bus product line. The
margin improvement, combined with higher net sales, drove gross profit up to
$11.1 million, or a 45.7% increase from the $7.6 million reported in the
fourth quarter of 2012. The margin expansion is primarily due to product mix,
continued manufacturing efficiency improvements and higher capacity
utilization.

An income tax expense of $0.7 million was recorded in the quarter due to the
Company’s return to normalized tax rates. In last year’s comparable period,
the Company recorded an income tax benefit of $0.1 million that included the
reversal of a deferred tax valuation allowance due to improved profitability.

Net income for the fourth quarter was $1.7 million, or $0.10 per diluted
share, up from net income of $0.4 million, or $0.02 per diluted share, last
year.

During the quarter, the Company announced its intention to divest the highly
competitive shuttle bus business. The increasingly competitive environment in
the bus industry has led to higher discounting making it more difficult to
meet Supreme’s profitability objectives. While shuttle bus products
represented less than 13% of the Company’s consolidated 2013 sales, the
business generated unacceptable margins in 2013.

On a proforma basis, adjusting and eliminating the net losses of the shuttle
bus business (including costs associated with the King County lawsuit) and
normalizing the 2012 income tax expense, diluted earnings per share more than
doubled to $0.13, compared with $0.05 a year ago. A reconciliation of net
income and net income per share is included with this press release.

“The decision to divest the shuttle bus business is expected to help us
maximize shareholder value by optimally allocating resources where they will
earn the highest return. Supreme’s core business of manufacturing and selling
customized truck bodies has recently undergone successful facilities and
manufacturing process upgrades, resulting in better operating efficiencies and
expanding margins for these products,”said President and Chief Executive
Officer Mark Weber.

2013 Full-Year Results

Consolidated net sales for the twelve-month period decreased 1.4%, to $282.3
million, from $286.1 million last year, due to lower bus and specialty vehicle
sales offset by increased truck body volume. For the twelve months, gross
profit increased to $46.8 million, from last year’s $43.5 million. Gross
margin, as a percentage of sales, increased to 16.6%, compared with 15.2% in
2012. The margin growth reflects improved product mix and margin-expansion
initiatives including process improvements, manufacturing efficiencies and
competitive sourcing.

Income tax expense increased by $3.2 million versus last year resulting from
the normalized tax rates in 2013, and last year’s reversal of the valuation
allowance.

Reported net income for the twelve months was $6.4 million, or $0.39 per
diluted share, compared with $11.8 million, or $0.73 per diluted share last
year. On a proforma basis, adjusting and eliminating for the impact of the
shuttle bus business (including costs associated with the King County lawsuit)
and normalizing the 2012 income tax expense, diluted earnings per share for
the full year improved to $0.68 compared to $0.53 for 2012.

Backlog at the end of the year increased 28.4% to $71.5 million, compared with
$55.7 million at the end of 2012, excluding shuttle bus business.

Additional year-over-year key performance indicators include:

  *Working capital was $37.6 million at December 28, 2013, compared to $38.6
    million for the fourth quarter 2012.
  *Net cash provided by operating activities in 2013 was $13.5 million,
    compared with $12.4 million in 2012.
  *Total debt declined more than 30% to $9.7 million at year end, compared
    with $14.1 last year.
  *Stockholders’ equity increased 10.3% to $74.1 million at December 28,
    2013, compared with $67.2 million at December 29, 2012.
  *Book value, on a per-share basis, grew to $4.59 at year-end versus $4.20
    at the end of last year.

“The pending divestiture of the shuttle bus business represents a continued
transition towards an organizational focus on profitable growth. As we enter
2014, we are encouraged by the opportunities we see in the work truck and
specialty vehicle product lines, where customers value high-quality products
and dependable delivery performance. Supreme will celebrate its 40^th
Anniversary during 2014, which is a direct result of our dedicated employees
and loyal customers,” Weber concluded.

Conference Call Information

A conference call will take place tomorrow, February 14, 2014, at 9:00 a.m.
EST to review the 2013 fourth-quarter and full-year results. To participate in
the live call, dial 877-300-8521 (International: 412-317-6026) 10 minutes
before the call begins, or at 8:50 a.m. EST. The conference ID is 10040843.
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.

About Supreme Industries

Supreme Industries, Inc. (NYSE MKT: STS), is a nationwide manufacturer of
truck bodies and specialty vehicles produced to the specifications of its
customers. 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 28,    December 29,     December 28,     December 29,
                 2013             2012             2013              2012
Net Sales        $ 72,534,328     $ 57,728,124     $ 282,273,299     $ 286,140,112
Cost of sales     61,475,298     50,135,847     235,520,946     242,644,088 
Gross profit       11,059,030       7,592,277        46,752,353        43,496,024
                                                                     
Selling,
general and        8,659,771        7,371,194        34,167,348        31,602,317
administrative
expenses
Legal
settlement and     -                161,329          3,600,161         616,744
related costs
Other income      (98,529    )    (450,472   )    (925,537    )    (1,217,057  )
Operating          2,497,788        510,226          9,910,381         12,494,020
income
                                                                     
Interest          87,836         241,705        625,190         971,225     
expense
Income before      2,409,952        268,521          9,285,191         11,522,795
income taxes
                                                                     
Income tax
expense           744,450        (115,056   )    2,859,315       (310,190    )
(benefit)*
Net income       $ 1,665,502     $ 383,577       $ 6,425,876      $ 11,832,985  
                                                                     
Income per
share:
Basic            $ 0.10           $ 0.02           $ 0.40            $ 0.74
Diluted            0.10             0.02             0.39              0.73
                                                                     
Shares used in
the
computation of
income per
share:
(Adjusted for
5% stock
dividend paid
on June 3,
2013)
Basic              16,180,874       15,980,849       16,113,136        15,954,564
Diluted            16,581,208       16,219,930       16,487,804        16,212,508

* The Company reported a tax benefit for both periods of 2012, resulting from
the utilization of previously unrecognized net operating loss carryforwards.


Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
                                                           
                                             December 28,      December 29,
                                             2013              2012
                                                               
Assets
Current assets                               $ 65,923,357      $ 61,007,286
Property, plant and equipment, net             46,387,839        42,937,988
Other assets                                  1,219,655        1,142,809
Total assets                                 $ 113,530,851     $ 105,088,083
                                                               
Liabilities
Current liabilities                          $ 28,343,456      $ 22,363,408
Long-term liabilities                         11,107,228       15,561,793
Total liabilities                              39,450,684        37,925,201
Total stockholders' equity                    74,080,167       67,162,882
Total liabilities and stockholders' equity   $ 113,530,851     $ 105,088,083
                                                               


Supreme Industries, Inc. and Subsidiaries
Reconciliation of Net Income and Net Income Per Share
                                                           
                 Three Months Ended              Twelve Months Ended
                 December 28,   December 29,     December 28,   December 29,
                 2013           2012             2013           2012
                                                                
Net income, as   $ 1,665,502    $ 383,577        $ 6,425,876    $ 11,832,985
reported
                                                                
Normalized
taxes (2012
periods
adjusted to
2013 effective    -             197,760        -             3,859,211  
tax rate, net
of tax benefit
reported in
2012)
                                                                
Tax adjusted
net income         1,665,502      185,817          6,425,876      7,973,774
before shuttle
bus operations
                                                                
Shuttle bus
operations
(including
legal costs):
Reported legal
settlement and     -              161,329          3,600,161      616,744
related costs
Shuttle bus
loss from
operations,       750,459       883,427        4,236,270     334,587    
net of legal
above
Total shuttle      750,459        1,044,756        7,836,431      951,331
bus operations
Tax effect
(shuttle bus
rates–39.1%       293,429       411,634        3,064,045     374,824    
for 2013,
39.4% for 2012
periods)
Total
adjustment,       457,030       633,122        4,772,386     576,507    
net of tax
Adjusted net     $ 2,122,532    $ 818,939       $ 11,198,262   $ 8,550,281  
income
                                                                
Per Share
Data:
                                                                
Net Income (as
reported, not
calculated on
this schedule)
Basic            $ 0.10         $ 0.02           $ 0.40         $ 0.74
Diluted            0.10           0.02             0.39           0.73
Adjusted
income tax
expense
Basic              -              (0.01      )     -              (0.24      )
Diluted            -              (0.01      )     -              (0.24      )
Shuttle bus
operations
Basic              0.03           0.04             0.30           0.04
Diluted           0.03          0.04           0.29          0.04       
Adjusted net
income
Basic            $ 0.13         $ 0.05           $ 0.70         $ 0.54
Diluted            0.13           0.05             0.68           0.53
                                                                
Shares used
for per-share
calculations:
(Adjusted for
5% stock
dividend paid
on June 3,
2013)
Basic              16,180,874     15,980,849       16,113,136     15,954,564
Diluted            16,581,208     16,219,930       16,487,804     16,212,508

Contact:

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