-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VhHKZ4klWKjqA0aZB+FcBWXaMGERmusisRuKvzt0fP4VJCYTUPsLCX2KiUYcrz5d 8auc0DyBKTOgzIJAyCu0sA== 0000350846-98-000007.txt : 19980512 0000350846-98-000007.hdr.sgml : 19980512 ACCESSION NUMBER: 0000350846-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980511 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPREME INDUSTRIES INC CENTRAL INDEX KEY: 0000350846 STANDARD INDUSTRIAL CLASSIFICATION: TRUCK & BUS BODIES [3713] IRS NUMBER: 751670945 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08183 FILM NUMBER: 98615180 BUSINESS ADDRESS: STREET 1: 65140 US 33 E STREET 2: PO BOX 237 CITY: GOSHEN STATE: IN ZIP: 46526 BUSINESS PHONE: 2196423070 MAIL ADDRESS: STREET 1: P O BOX 237 STREET 2: 65140 U S 33 EAST CITY: GOSHEN STATE: IN ZIP: 46526 FORMER COMPANY: FORMER CONFORMED NAME: EXPLORATION SURVEYS INC DATE OF NAME CHANGE: 19850813 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1998 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-8183 SUPREME INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 75-1670945 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) No.) 65140 U.S. 33 East, P.O. Box 237, Goshen, Indiana 46528 (Address of principal executive offices) Registrant's telephone number, including area code: (219) 642-3070 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock ($.10 Par Value) Outstanding at May 7, 1998 Class A 8,862,772 Class B 1,546,773 The index to Exhibits is at page 13 in the sequential numbering system. Total number of pages: 13. Page 1 of 13 SUPREME INDUSTRIES, INC. CONTENTS Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets 3 & 4 Consolidated Statements of Income 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 & 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 & 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 Index to Exhibits 13 Page 2 of 13 Part I. Financial Information Item 1. Financial Statements Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets March 31, December 31, 1998 1997 --------------- --------------- Assets (Unaudited) Current assets: Cash and cash equivalents............. $136,217 $159,044 Accounts receivable, net.............. 26,398,781 23,188,066 Inventories........................... 32,871,072 28,404,786 Deferred income taxes................. 973,657 973,657 Other current assets.................. 725,719 803,442 --------------- --------------- Total current assets............. 61,105,446 53,528,995 --------------- --------------- Property, plant and equipment, at cost.. 47,791,974 46,083,344 Less, Accumulated depreciation and amortization............... 17,037,526 16,522,903 --------------- --------------- Property, plant and equipment, net............................ 30,754,448 29,560,441 Intangible assets, net.................. 1,654,558 1,705,385 Other assets............................ 1,056,446 1,079,491 --------------- --------------- Total assets..................... $94,570,898 $85,874,312 =============== =============== The accompanying notes are a part of the consolidated financial statements. Page 3 of 13 Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets, Concluded March 31, December 31, 1998 1997 --------------- --------------- Liabilities and Stockholders' Equity (Unaudited) Current liabilities: Current maturities of long-term debt... $2,232,633 $2,119,692 Trade accounts payable................. 11,753,599 10,433,051 Accrued income taxes................... 2,634,275 1,098,111 Other accrued liabilities.............. 6,708,318 9,514,186 --------------- --------------- Total current liabilities......... 23,328,825 23,165,040 Long-term debt........................... 23,406,122 17,359,703 Deferred income taxes.................... 898,825 898,825 --------------- --------------- Total liabilities................. 47,633,772 41,423,568 --------------- --------------- Stockholders' equity: Class A Common Stock, $.10 par value... 888,746 885,599 Class B Common Stock, convertible into Class A Common Stock on a one-for-one basis, $.10 par value................ 154,677 154,677 Additional paid-in capital............. 31,838,751 31,743,249 Retained earnings...................... 14,305,488 11,917,755 Treasury stock, at cost................ (250,536) (250,536) --------------- --------------- Total stockholders' equity........ 46,937,126 44,450,744 --------------- --------------- Total liabilities and stockholders' equity............ $94,570,898 $85,874,312 =============== =============== The accompanying notes are a part of the consolidated financial statements. Page 4 of 13 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Three Months End March 31, ---------------- --------------- 1998 1997 ---------------- --------------- Revenues................................. $55,493,345 $44,173,303 Costs and expenses: Cost of sales.......................... 46,120,374 37,036,681 Selling, general and administrative.... 4,946,225 3,949,378 Interest............................... 417,013 349,845 ---------------- --------------- 51,483,612 41,335,904 ---------------- --------------- Income before income taxes........ 4,009,733 2,837,399 Income taxes............................. 1,622,000 1,152,000 ---------------- --------------- Net income........................ $2,387,733 $1,685,399 ================ =============== Earnings per share: Basic............................. $.23 $.16 Diluted........................... .23 .16 Shares used in the computation of earnings per share: Basic............................. 10,383,073 10,348,553 Diluted........................... 10,476,055 10,467,754 The accompanying notes are a part of the consolidated financial statements. Page 5 of 13 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three Months End March 31, --------------- --------------- 1998 1997 --------------- --------------- Cash flows from operating activities: Net income................................ $2,387,733 $1,685,399 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization......... 732,620 706,649 Loss on disposal of equipment......... 84,087 7,518 Changes in operating assets and liabilities......................... (7,548,434) (5,251,184) --------------- --------------- Net cash (used in) operating activities. (4,343,994) (2,851,618) --------------- --------------- Cash flows from investing activities: Additions to property, plant and equipment............................... (2,068,787) (1,027,814) Proceeds from disposal of property, plant and equipment........................... 108,900 36,950 (Increase) decrease in other assets....... 23,045 (10,762) --------------- --------------- Net cash (used in) investing activities. (1,936,842) (1,001,626) --------------- --------------- Cash flows from financing activities: Proceeds from revolving line of credit and other long-term debt................ 25,405,232 17,221,848 Repayments of revolving line of credit and other long-term debt.................... (19,245,872) (13,615,655) Proceeds from exercise of stock options and warrants............................ 98,649 31,144 --------------- --------------- Net cash provided by financing activities............................ 6,258,009 3,637,337 --------------- --------------- Decrease in cash and cash equivalents....... (22,827) (215,907) Cash and cash equivalents, beginning of period.................................... 159,044 220,678 --------------- --------------- Cash and cash equivalents, end of period.... $136,217 $4,771 =============== =============== The accompanying notes are a part of the consolidated financial statements. Page 6 of 13 SUPREME INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all of the information and financial statement disclosures necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with generally accepted accounting principles. In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair statement of the interim periods reported. All adjustments are of a normal and recurring nature. The December 31, 1997 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. NOTE B - INVENTORIES Inventories, which are stated at the lower of cost or market with cost determined on the first-in-first-out method, consist of the following: March 31, December 31, 1998 1997 --------------- -------------- Raw materials............... $ 18,878,339 $ 16,896,669 Work-in-progress............ 4,553,082 4,553,082 Finished goods.............. 9,439,651 6,955,035 --------------- -------------- $ 32,871,072 $ 28,404,786 =============== ============== The valuation of raw materials, work-in-progress and finished goods inventories at interim dates is based upon a gross profit percentage method and bills of materials. The Company has historically had favorable and unfavorable adjustments in the third and fourth quarters resulting from the annual physical inventories. The Company is continuing to refine its costing procedures for valuation of interim inventories in an effort to minimize the annual book to physical inventory adjustments. NOTE C - INCOME TAXES The effective income tax rate for the three months ended March 31, 1998 was 40.5% compared to 40.6% for the three months ended March 31, 1997. Page 7 of 13 NOTE D - EARNINGS PER SHARE The Company has adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share," retroactively for all periods presented. SFAS No. 128 requires the Company to present "basic" and "diluted" earnings per share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share gives effect to all potentially dilutive securities that were outstanding during the period. The Company's diluted earnings per share is computed as follows: Three Months Ended March 31, 1998 1997 ---- ---- Net Income $2,388 $1,685 ------ ------ Weighted average number of shares outstanding (used in computation of basic earnings per share) 10,383 10,349 Effect of dilutive securities: Options and warrants 93 119 ------ ------ Diluted shares outstanding (used in computation of diluted earnings per share) 10,476 10,468 ====== ====== The computations of the number of common shares used in the determination of 1997 basic and diluted earnings per share give retroactive recognition to the two (2) 5% common stock dividends declared and paid in 1997. Page 8 of 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations Revenues for the quarter ended March 31, 1998 increased $11,320,042 to $55,493,345 from $44,173,303 for the quarter ended March 31, 1997. Net income increased $702,334 to $2,387,733 for the quarter ended March 31, 1998 from $1,685,399 for the quarter ended March 31, 1997. Both basic and diluted earnings per share advanced $.07 to $.23 for the quarter ended March 31, 1998 when compared to the quarter ended March 31, 1997. Basic and diluted earnings per share for 1997 have been adjusted for the two (2) 5% common stock dividends declared and paid in 1997. The Company experienced growth in all of its product lines. The most significant increases were in the Company's dry freight, refrigerated and bus product lines. The Company's new product lines, armored trucks, trolley cars and mid size buses and Spartan Service Vans accounted for 7.9% of the Company's revenue growth in the first quarter. The Company also experienced considerable growth in each of the geographical areas it serves. The Company's gross profit percentage increased .7% to 16.9% for the quarter ended March 31, 1998 from 16.2% for the quarter ended March 31, 1997. Both direct labor and overhead expenses as a percentage of revenues declined slightly when compared to the comparable amounts a year ago while material cost rose slightly. Selling, general and administrative expenses were 8.9% of revenues for both the quarter ended March 31, 1998 and March 31, 1997. The actual dollar increase of $996,847 is attributed to the increase in revenues. Interest expense increased $67,168 for the quarter ended March 31, 1998 to $417,013 from $349,845 for the quarter ended March 31, 1997. The increase is attributable to higher borrowings under the Company's revolving line of credit to finance the increased levels of accounts receivable and inventories resulting from the increase in revenues. Liquidity and Capital Resources Funds available under the Company's revolving credit agreement were adequate to finance operations and provide for capital expenditures during the quarter ended March 31, 1998. Net income was the most significant component of operating cash flow followed by depreciation and amortization. Increases in both accounts receivable and inventories were the most significant uses of operating cash flows during the period. The significant increase in revenues was responsible for the increase in both receivables and inventory. Page 9 of 13 The major investing activities during the quarter were the capacity expansions at the Company's Goshen, Indiana; Jonestown, Pennsylvania; and Griffin, Georgia facilities. They are all complete and in operation and add 15 to 20% additional capacity above what was available in 1997. The principal financing activity during the quarter was the use of the Company's revolving credit agreement to finance operations and capital expenditures. The Company had $3.3 million available under its revolving credit agreement at March 31, 1998. The Company anticipates the cash flow from operations and amounts available under its revolving line of credit will be sufficient to meet the Company's cash needs during 1998. The Company is in the process of implementing new computer software that will allow it to process transactions in the year 2000 and beyond as well as provide better operating information timely once completely installed. The Company has established an implementation team and provided them with the training and resources necessary to have all Company facilities year 2000 compliant well in advance of December 31, 1999. This report contains forward-looking statements, other than historical facts, which reflect the view of the Company's management with respect to future events. 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, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, limitations on the availability of chassis on which the Company's product is dependent, availability of raw materials and severe interest rate increases. The Company 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. Page 10 of 13 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) Exhibits: Exhibit 27 - Financial Data Schedule b) Reports on Form 8-K: None Page 11 of 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SUPREME INDUSTRIES, INC. DATE: May 11, 1998 BY: /s/ROBERT W. WILSON Robert W. Wilson Executive Vice President, Treasurer, Chief Financial Officer and Director (Principal Financial and Accounting Officer) (Signing on behalf of the Registrant and as Principal Financial Officer.) Page 12 of 13 SUPREME INDUSTRIES, INC. FORM 10-Q INDEX TO EXHIBITS Sequential Number Assigned Numbering System in Regulation S-K Page Number Item 601 Description of Exhibit of Exhibit - ----------------- ---------------------- ---------------- (2) No exhibit. (3) No exhibit. (4) No exhibit. (10) No exhibit. (15) No exhibit. (18) No exhibit. (19) No exhibit. (22) No exhibit. (23) No exhibit. (24) No exhibit. (27) Financial data schedule. (99) No exhibit. Page 13 of 13 EX-27 2
5 3-MOS DEC-31-1998 MAR-31-1998 136,217 0 26,828,781 430,000 32,871,072 61,105,446 47,791,974 17,037,526 94,570,898 23,328,825 23,406,122 0 0 1,043,423 0 94,570,898 55,493,345 55,493,345 46,120,374 46,120,374 4,946,225 0 417,013 4,009,733 1,622,000 2,387,733 0 0 0 2,387,733 0.23 0.23
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