Goshen-based commercial vehicles maker Supreme Industries Inc. (NYSE: STS) has announced a $4.3 million second quarter profit, compared to $925,000 during the same period one year ago. Chief Executive Officer Mark Weber says a chassis shortage that hampered financial performance during the first quarter of 2014 has eased. July 28, 2014
GOSHEN, Ind. – Supreme Industries, Inc. (NYSE: MKT), a leading manufacturer of specialized commercial vehicles including truck bodies and specialty vehicles, today announced financial results for its second quarter ended June 28, 2014. The Company divested its unprofitable shuttle bus operations in March 2014, which have been reclassified as discontinued operations in its financial statements.
2014 Second-Quarter Results
Consolidated net sales from continuing operations grew to $71.6 million in the second quarter, reflecting a 3.8 percent increase compared with $68.9 million during the second quarter of last year. Net income per diluted share was $0.25 versus $0.06 during the second quarter of 2013; on a continuing operations basis, net income per diluted share was $0.25 and $0.24 for the respective periods.
Gross profit from continuing operations was $14.6 million, or 20.5 percent of sales, compared with $14.5 million, or 21.1 percent of sales, in the second quarter of 2013. The current quarter margin percentage contraction was primarily due to customer and product mix. Additionally, prior year margins benefited from a greater proportion of higher-margin retail truck sales with fleet orders being placed later than normal in 2013. This year, fleet ordering patterns have returned to normal and as a result, the second quarter of 2014 included a higher percentage of fleet business versus the prior year.
Supreme settled a lawsuit in the second quarter of 2013 that contributed to a $3.0 million after-tax net loss being recorded in its discontinued shuttle bus operations for that quarter. Including the negative impact from discontinued operations on 2013's results, reported net income improved to $4.3 million in the quarter, or $0.25 per diluted share, up from reported net income of $0.9 million, or $0.06 per diluted share, in last year's comparable quarter.
Operating income from continuing operations in the second quarter of 2014 was $6.4 million, equal to last year's second quarter operating income. Income tax expense declined in the second quarter to $2.1 million, from $2.4 million in the same quarter last year, due to lower effective tax rates. Net income from continuing operations improved to $4.3 million, or $0.25 per diluted share during the second quarter of 2014, up from $4.0 million, or $0.24 per diluted share in the same quarter of 2013.
“Business conditions remained solid during the spring and the OEM chassis shortage that hampered financial performance in the first quarter has been mitigated. This allowed us to generate improvements in both sales and earnings in the second quarter,” said Mark Weber, President and Chief Executive Officer.
2014 First-Half Results
Consolidated net sales from continuing operations in the first half of 2014 were basically flat with last year at $124.9 million, versus $125.3 million.
“During the first half of the year we made notable talent and training investments in our marketing and sales organizations. We also rolled out our proprietary, lightweight body wall, FiberPanel HC, that allows customers to reduce operating costs by increasing payload. Our investments in both product and customer facing talent are in support of our profitable growth agenda for Supreme,” Weber added.
Gross margin, as a percentage of sales, contracted to 18.0 percent, compared with 20.5 percent in 2013's first half. This resulted in first half gross profit declining to $22.5 million, compared with $25.6 million in last year's comparable period primarily due to unfavorable product mix, shortages of light duty chassis and severe weather conditions in the first quarter of 2014. Income from continuing operations in the first half of 2014 was $4.5 million, compared with $6.6 million a year ago.
The net loss generated by the Company's discontinued operations in the first half of 2014 totaled $1.6 million, compared with $3.4 million in the first half of 2013. Including the impact of discontinued operations from both periods, reported net income for the 2014 six months was $2.9 million, or $0.17 per diluted share, compared with $3.2 million, or $0.20 per diluted share in 2013.
Sales order backlog at the end of the quarter was $56.8 million, and $62.9 million at the end of the second quarter of 2013. Second quarter 2013 backlog included $8.9 million of fleet orders that were placed later than normal in the year.
Additional financial highlights:
-Cash and equivalents increased to $12.5 million, up from $3.9 million at December 28, 2013.
-Net cash provided by operating activities during the first half of 2014 was $6.2 million, compared with $4.5 million of net cash generated by operations in 2013.
-Stockholders' equity increased to $77.6 million at June 28, 2014, compared with $74.1 million at December 28, 2013.
Source: Supreme Industries Inc.