Supreme 2014 Profit Ticks HigherPosted: Updated:
Goshen-based Supreme Industries Inc. (NYSE: STS) is reporting 2014 full-year net income of $6.9 million, compared to $6.4 million in 2013. Chief Executive Officer Mark Weber says orders are increasing because the company's customers are "generally optimistic" about market conditions.
February 20, 2015
Goshen, Ind. -- Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of specialized commercial vehicles including truck bodies, trolleys and specialty vehicles, today announced financial results for its fourth quarter and full year ended December 27, 2014.
2014 Fourth-Quarter Results
Consolidated net sales from continuing operations in the fourth quarter of 2014 declined to $53.3 million, compared with $64.9 million in the same quarter last year. In the prior year quarter, net sales reflected an incremental fleet order of approximately $8.0 million that was placed unseasonably late during the 2013 calendar year. That account returned to a more normalized spring delivery pattern in 2014, resulting in the majority of the year-over-year decline of fourth quarter sales.
Net income was $1.5 million in the quarter, compared with $1.7 million in 2013's fourth quarter. 2013 results included a $0.5 million net loss related to discontinued operations. Net income from continuing operations was $1.5 million or $0.09 per diluted share in the final quarter of 2014, versus $2.1 million, or $0.13 per diluted share, in last year's comparable quarter.
"The work truck market reported mixed results versus 2013 for the quarter; however, our new orders gained momentum," said Mark Weber, President and Chief Executive Officer. "Our customers are generally optimistic about future market conditions and are anticipating growth in 2015, which is reflected in our improved order backlog."
Due to the lower net sales, gross profit from continuing operations declined to $10.0 million in the quarter, versus $11.2 million last year. However, gross margin improved to 18.8% of sales, compared with 17.2% of sales in the fourth quarter of 2013. The current quarter margin expansion resulted from overhead cost controls and the lower proportion of fleet shipments compared with the prior year.
Operating income from continuing operations decreased to $2.4 million from $3.2 million primarily due to the lower sales level. Interest expense increased $0.2 million during the quarter as a result of more chassis on hand to bridge possible OEM delivery delays.
2014 Twelve-Month Results
Consolidated net sales from continuing operations in the twelve-month period were $236.3 million, compared with $246.8 million last year. The revenue decline in 2014 was due to softer retail demand, as well as a chassis shortage and severe weather that hampered first-quarter sales and profitability. As a result, full-year gross margin contracted to 18.6% of net sales, compared with 19.6% of net sales in the prior year.
Operating income in 2014 was $13.0 million, compared with $17.6 million in 2013, and income from continuing operations was $8.5 million for the twelve-months of 2014, down from $11.2 million last year.
The Company's discontinued shuttle bus operations generated a $1.6 million after-tax net loss in 2014 and an after-tax net loss of $4.8 million in 2013. Including the negative impact from discontinued operations on both years' results, reported net income improved to $6.9 million, or $0.41 per diluted share in 2014, up from reported net income of $6.4 million, or $0.39 per diluted share, last year.
"During 2014, we actively addressed underperforming business units, invested capital to enhance growth and efficiency, and elevated customer focus across the organization. These initiatives and our improved financial condition have put us in the position to reinstate a quarterly cash dividend and return capital to shareholders," Weber said. "The growth in our order backlog also provides evidence that our sales initiatives are beginning to gain traction. These internal efforts, combined with positive market momentum, give us optimism as we look ahead to the coming year."
"Order backlog at the end of 2014 was up approximately 13% to $79.9 million, compared with $70.8 million at the end of the prior year and the backlog has continued to grow since the beginning of 2015, due to the receipt of additional fleet orders," he concluded.
Additional financial highlights:
Cash and cash equivalents increased to $11.6 million, up from $3.9 million at December 28, 2013.
Working capital increased to $44.4 million at December 27, 2014, from $36.7 million at December 28, 2013.
Controllable working capital improved to $31.6 million at December 27, 2014 from $38.2 million at December 28, 2013 (see reconciliation below).
Stockholders' equity increased to $81.0 million at December 27, 2014, compared with $74.1 million at December 28, 2013.
Book value, on a per share basis, grew to $4.94 at year-end versus $4.59 at the end of 2013.
Conference Call Information
A conference call will be held tomorrow, February 20, 2015, at 9:00 a.m. ET to review the fourth quarter and twelve-month results. To participate in the live call, dial 1-888-349-0089 (International: 412-902-4296) 10 minutes before the call begins, or 8:50 a.m. ET. The conference ID is 10060448. 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, trolleys 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.
Source: Supreme Industries Inc.