-----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, VYNYt9kEU7sd02kc/dMCBYzisYA8v+sUm6IZHUyAhayYvnJ93bnyZuz8rWKprfP0 Yhw9+7zeo+OrUfaxVYrEWQ== 0000350846-96-000019.txt : 19960515 0000350846-96-000019.hdr.sgml : 19960515 ACCESSION NUMBER: 0000350846-96-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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: 1934 Act SEC FILE NUMBER: 001-08183 FILM NUMBER: 96564249 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) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) (X) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1996 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 No.) incorporation or organization) 65140 U.S. 33 East, P.O. Box 237 Goshen, Indiana 46526 (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 3, 1996 Class A 7,177,731 shares Class B 1,402,976 shares The index to Exhibits is at page 10 in the sequential numbering system. Total pages: 11 1 of 11 SUPREME INDUSTRIES, INC. CONTENTS Pages Part I. Financial Information Item 1. Financial Statements: Consolidated Condensed Balance Sheets 3 & 4 Consolidated Condensed Statements of Income 5 Consolidated Condensed Statements of Cash Flows 6 Notes to Consolidated Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial 8 & 9 Condition and Results of Operations Part II. Other Information Signatures 9 Index to Exhibits 10 2 of 11 Part I. Financial Information Item 1. Financial Statements Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets March 31, December 31, 1996 1995 ---------------------------- Assets (Unaudited) Current assets: Cash and cash equivalents............... $178,423 $106,740 Accounts receivable, net................ 19,314,203 16,336,446 Inventories............................. 22,670,297 20,144,271 Deferred income taxes................... 910,918 910,918 Other current assets.................... 486,459 448,665 ---------------------------- Total current assets................. 43,560,300 37,947,040 ---------------------------- Property, plant and equipment: Land and improvements................... 2,147,783 2,123,848 Buildings and improvements.............. 9,343,330 9,028,195 Leasehold improvements.................. 4,872,923 4,845,816 Machinery and equipment................. 18,732,715 17,885,788 ---------------------------- 35,096,751 33,883,647 Less, Accumulated depreciation and amortization....................... 12,884,054 12,429,136 ---------------------------- Property, plant and equipment, net... 22,212,697 21,454,511 Intangible assets, net.................... 2,061,177 2,112,004 Other assets.............................. 1,354,505 913,107 ---------------------------- Total assets......................... $69,188,679 $62,426,662 ============================ The accompanying notes are a part of the consolidated financial statements. 3 of 11 Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets, Concluded March 31, December 31, 1996 1995 ----------------------------- Liabilities and Stockholders' Equity (Unaudited) Current liabilities: Current maturities of long-term debt.... $2,577,719 $2,609,815 Trade accounts payable.................. 7,883,812 6,343,766 Accrued income taxes.................... 708,593 138,682 Other accrued liabilities............... 4,321,788 5,715,879 ----------------------------- Total current liabilities............ 15,491,912 14,808,142 Long-term debt............................ 23,020,631 18,031,553 Deferred income taxes..................... 784,086 784,086 ----------------------------- Total liabilities.................... 39,296,629 33,623,781 ----------------------------- Stockholders' equity: Class A Common Stock, $.10 par value.... 717,512 673,861 Class B Common Stock, convertible into Class A Common Stock on a one-for-one basis, $.10 par value................. 140,298 180,166 Additional paid-in capital.............. 19,010,458 18,911,421 Retained earnings....................... 10,180,268 9,193,919 Treasury stock, at cost, 13,757 shares of Class A Common Stock............... (156,486) (156,486) ----------------------------- Total stockholders' equity........... 29,892,050 28,802,881 ----------------------------- Total liabilities and stockholders' equity............................. $69,188,679 $62,426,662 ============================= The accompanying notes are a part of the consolidated financial statements. 4 of 11 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Three Months Ended March 31, --------------------------- 1996 1995 --------------------------- Revenues.................................... $38,493,108 $43,669,383 Costs and expenses: Cost of sales............................. 32,659,515 37,405,360 Selling, general and administrative....... 3,584,052 3,267,471 Interest.................................. 533,192 483,285 --------------------------- 36,776,759 41,156,116 --------------------------- Income before income taxes............. 1,716,349 2,513,267 Income taxes.............................. 730,000 1,023,000 --------------------------- Net income............................. $986,349 $1,490,267 =========================== Earnings per share: Primary.................................. $.11 $.18 Fully diluted............................ .11 .17 Weighted average number of shares of common stock and common stock equivalents: Primary................................ 9,039,016 8,215,488 Fully diluted.......................... 9,301,414 8,889,783 The accompanying notes are a part of the consolidated financial statements. 5 of 11 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, --------------------------- 1996 1995 --------------------------- Cash flows from operating activities: Net income............................... $986,349 $1,490,267 Depreciation and amortization............ 470,035 431,176 Amortization of intangibles and other assets................................. 52,731 50,827 (Gain) loss on disposal of equipment..... 551 (2,894) Changes in operating assets and liabilities............................ (4,630,280) (7,599,745) --------------------------- Net cash used in operating activities........................ (3,120,614) (5,630,369) --------------------------- Cash flows from investing activities: Additions to property, plant and equipment.............................. (1,228,772) (1,210,424) Proceeds from sale of property, plant and equipment.......................... --- 2,894 Increase in intangible and other assets.. (443,304) --- ---------------------------- Net cash used in investing activities........................ (1,672,076) (1,207,530) ---------------------------- Cash flows from financing activities: Proceeds from revolving line of credit and other long-term debt............... 17,299,716 20,400,531 Repayments of revolving line of credit and other long-term debt............... (12,538,162) (13,744,304) Proceeds from exercise of stock options and warrants........................... 102,820 --- ---------------------------- Net cash provided by financing activities........................ 4,864,374 6,656,227 ---------------------------- Increase (decrease) in cash and cash equivalents.............................. 71,684 (181,672) Cash and cash equivalents, beginning of period................................... 106,740 273,720 ---------------------------- Cash and cash equivalents, end of period... $178,424 $92,048 ============================ The accompanying notes are a part of the consolidated financial statements. 6 of 11 SUPREME INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NOTE A -BASIS OF PRESENTATION AND OPINION OF MANAGEMENT The accompanying unaudited consolidated condensed 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. The December 31, 1995 condensed 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, 1996 1995 ----------- ----------- Raw materials.................. $14,091,781 $11,599,585 Work-in-progress............... 3,148,712 3,113,990 Finished goods................. 5,429,804 5,430,696 ----------- ------------ $22,670,297 $20,144,271 =========== ============ 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. Since 1989 the Company has had favorable adjustments in the fourth quarter 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 - LONG TERM DEBT On February 20, 1996 the Company amended its revolving credit agreement to extend the expiration two years to April 30, 1999. In addition, the revolving credit line was increased from $12.0 million to $20.0 million for the period each year from February 1 through June 30. The limit was increased from $12.0 million to $14.0 million for all other months of the year. Interest on outstanding borrowings under the revolving line of credit is payable monthly based on the bank's prime rate or certain basis points above the LIBOR rate depending on the pricing option selected and the Company's leverage ratio, as defined. The revolving line of credit also requires a commitment fee of 3/16% per annum based upon the annualized average unused portion. 7 of 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations Revenues for the quarter ended March 31, 1996 decreased $5,176,275 to $38,493,108 from $43,669,383 for the quarter ended March 31, 1995. Net income for the quarter ended March 31, 1996 decreased $503,918 to $986,349 from $1,490,267 for the quarter ended March 31, 1995. The revenue decrease was attributed to a significant decline in fleet revenues. This decline was the result of delayed chassis deliveries due to labor disputes at the chassis manufacturer. The second quarter of 1996 will benefit from the delayed deliveries. The Company also experienced generally softer market conditions in the Northeastern, Midwestern and Southwestern markets, however as the second quarter begins, the Company has seen signs of improved conditions in these areas. The severe weather conditions encountered in the Company's large Northeastern market was also a major cause for the revenue decline. The Company's gross profit improved .9% for the quarter ended March 31, 1996 when compared to the quarter ended March 31, 1995. Contributing to the improvement was a decline in material costs as a percentage of revenues when compared to the prior year's comparable quarter. The decline in material costs resulted from realizing the full benefit of price increases implemented throughout 1995 and from favorable raw material pricing experienced during the first quarter of 1996. Partially offsetting this material cost decline were increases in both direct labor and overhead as a percentage of revenues when compared to the prior year's comparable quarter. The increases in direct labor were caused by expenses in preparation for fleet deliveries that won't occur until the second quarter. The increase in the overhead expense as a percentage of revenues was caused by the fixed nature of certain components of the overhead pool when related to lower revenues in the current year's quarter. It is anticipated that both direct labor and overhead as a percentage of revenues will improve in the second quarter of 1996 in correlation with the deliveries of the delayed fleet orders as well as higher overall revenues. Selling, general and administrative expenses increased $316,581 to $3,584,052 from $3,267,471 for the quarter ended March 31, 1996 when compared to the quarter ended March 31, 1995. The increases resulted from updating the Company's sales literature, increased promotional and show expenses as well as increased advertising in trade publications. The decline in net income for the quarter to 2.6% of revenues from 3.4% of revenues for the prior year's comparable quarter is due to the factors discussed above. Liquidity and Capital Resources Net income and funds available under the Company's revolving credit agreement were sufficient to finance the 1996 first quarter operations, finance capital expenditures and service debt obligations. Availability under the Company's revolving credit agreement was $2.7 million at March 31, 1996. 8 of 11 The ratio of current assets to current liabilities was 2.8 to 1 at March 31, 1996 compared to 2.4 to 1 at December 31, 1995. Capital expenditures were $1.2 million for the quarter ended March 31, 1996. These expenditures were funded with borrowings under the Company's revolving credit agreement. During the first quarter 1996, the Company amended its revolving credit agreement to extend the expiration two years to April 1999. In addition, the revolving credit line was increased from $12.0 million to $20.0 million for the period each year from February 1 through June 30. The increase is necessary to fund operations during the building of fleet inventory which is built in advance of specific delivery deadlines. The revolver limit was increased from $12.0 million to $14.0 million for all other months of the year due to the overall growth of the Company. The Company anticipates that cash flow from operations and funds available from outside financing will be sufficient to finance operations and planned capital expenditures the balance of 1996. PART II. OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 11 - Statements Regarding Earnings Per Share b) Reports on Form 8-K - None 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 13, 1996 By:/s/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) 9 of 11 INDEX TO EXHIBITS Exhibit No. Description Page 11 Computation of Earnings Per Share 11 10 of 11 EXHIBIT 11.1-- STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS SUPREME INDUSTRIES, INC. (Amounts in thousands, except per share data) Three Months Ended March 31, ---------------------------- 1996 1995 ------ ------ PRIMARY Average shares outstanding 8,553 8,159 Net effect of dilutive stock options and warrants - based on the treasury stock method using average market price 486 57 ------ ------ TOTAL 9,039 8,216 ====== ====== Net income $ 986 $1,490 ====== ====== Net income per share $ .11 $ .18 ====== ====== FULLY DILUTED Average shares outstanding 8,553 8,159 Net effect of dilutive stock options and warrants - based on the treasury stock method using the period-end market price, if higher than the average market price 486 120 Net effect of subordinated convertible notes 262 611 ------ ------ TOTAL 9,301 8,890 ====== ====== Net income $ 986 $1,490 Interest expense reduction due to assumed conversion of subordinated convertible notes - net of tax 15 34 ------ ------ Net income as adjusted $1,001 $1,524 ====== ====== Net income per share $ .11 $ .17 ====== ====== 11 of 11 EX-27 2
5 3-MOS DEC-31-1996 MAR-31-1996 178,423 0 19,744,203 430,000 22,670,297 43,560,300 35,096,751 12,884,054 69,188,679 15,491,912 23,020,631 857,810 0 0 0 69,188,679 38,493,108 38,493,108 32,659,515 32,659,515 3,584,052 0 533,192 1,716,349 730,000 986,349 0 0 0 986,349 0.11 0.11
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