Supreme Industries, Inc. (NASDAQ:STS)

Fourth Quarter 2013 Results

• Net sales for the fourth quarter increased 25.6%, to $72.5 million, compared with $57.7 million last year.
• The company reported EPS of $0.10 per diluted share, compared to $0.02 per diluted share for the same quarter last year.

“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.

“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 40th Anniversary during 2014, which is a direct result of our dedicated employees and loyal customers,” Weber concluded.

GOSHEN, Ind.--(BUSINESS WIRE)--Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of specialized commercial vehicles including truck bodies, trolleys, armored and specialty vehicles, today announced that it intends to divest its shuttle-bus business.

Supreme’s core business of manufacturing and selling customized truck bodies has recently undergone successful facilities and manufacturing upgrades resulting in enhanced operating efficiencies and margins for these products. Shuttle bus products currently represent less than 12% of the Company’s consolidated sales and had a materially adverse impact on consolidated earnings in 2013. The divestiture is intended to further expand profit margins on a consolidated basis.

“As a proportion of revenue mix, bus products have represented a declining percentage of our sales and shuttle buses, in particular, have failed to meet profitability objectives,” said President and Chief Executive Officer Mark Weber. “This action allows us to concentrate on markets where we can maximize future returns for shareholders and eliminate the substantial drag on earnings from the shuttle bus business.”

“We remain committed to the trolley business,” he added. “Furthermore, to avoid disruptions for our shuttle-bus customers, we plan to assist the future owners with a swift and orderly transition. This approach will optimize the value of the business and benefit all constituents including the new owners, customers and employees.”

Additional information will be provided when the Company releases its fourth-quarter and full-year 2013 financial results in February.

Third Quarter 2013 Results

• The company reported sales of $67.3 million, compared to $71.6 million for the same quarter 2012.
• The company reported EPS of $0.09, compared to $0.22 for the same quarter 2012.

“While we are certainly not satisfied with our overall sales decline in the third quarter, we are very encouraged with strong orders in our truck division during the period. Based on our backlog, we anticipate the fourth quarter will reflect substantially improved shipments over the prior year’s comparable quarter barring any unforeseen supply chain chassis issues. We have made good progress on improving on-time deliveries and there are additional opportunities remaining to compress the order-to-cash conversion cycle,” said President and Chief Executive Officer Mark Weber.

First Quarter 2013 Results

• Consolidated net sales of $65.9 million for the first quarter declined 8.7% from $72.2 million in last year’s comparable period.
• Net income for the first quarter of 2013 was $2.3 million, or $0.15 per diluted share, compared with net income of $2.5 million, or $0.16 per diluted share, last year. Applying the 2013 effective tax rate to results in the first quarter of 2012, would have resulted in net income of $1.7 million, or $0.11 per diluted share.

Supreme’s Chief Financial Officer and Interim Chief Executive Officer Matthew Long said: “The truck division’s strong performance was a significant highlight during the year’s opening quarter. By responding to softer demand from fleet operators and increasing retail sales, we not only achieved higher year-over-year sales of trucks, but also substantial margin improvement. In addition to the 230 basis points of margin expansion versus last year’s first quarter, margins widened more than 400 basis points sequentially since the fourth quarter of 2012.”

First Quarter 2012 Results

• Consolidated net sales increased 6.0% to $72.5 million for the quarter, up from $68.4 million in last year’s comparable period.
• Gross profit improved 67% to $10.9 million from last year’s $6.5 million. Gross profit, as a percentage of sales, expanded to 15.0%, compared with 13.1% in the fourth quarter of 2011, and 9.5% in the first quarter of 2011.
• The Company reported net income from continuing operations of $2.6 million, or $0.17 per diluted share, for the 2012 quarter, compared with a loss from continuing operations of $1.0 million, or $0.07 per share, in the prior-year first quarter.

Supreme’s Interim Chief Executive Officer and Chief Financial Officer Matthew Long said: “We are pleased to report our third consecutive quarter of profitability and are encouraged by the financial progress our organization has achieved. The momentum that began to take hold during the third quarter of 2011 continued through the first quarter of 2012. We believe these ongoing efforts should yield benefits as we progress through the year.”