-----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, J4rtjZXwlvUWZ1Bx20Nq5r2phJMZR7h+NQRVjzeq7/0C4KXimYyjU0+qvElm76Hc Ho5SyWGuL/bjTpngpJ5wvQ== 0000350846-96-000023.txt : 19960816 0000350846-96-000023.hdr.sgml : 19960816 ACCESSION NUMBER: 0000350846-96-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96614035 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 June 30, 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 incorporation or organization) No.) 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 July 29,1996 Class A 8,012,735 Class B 1,402,976 The index to Exhibits is at page 12 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 8 & 9 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 10 Signatures 11 Index to Exhibits 12 Page 2 of 13 Part I. Financial Information Item 1. Financial Statements Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets June 30, December 31, 1996 1995 ----------- ----------- Assets (Unaudited) Current assets: Cash and cash equivalents.................. $95,034 $106,740 Accounts receivable, net................... 19,562,995 16,336,446 Inventories................................ 22,342,978 20,144,271 Deferred income taxes...................... 910,918 910,918 Other current assets....................... 487,674 448,665 ------------ ------------ Total current assets.................. 43,399,599 37,947,040 ------------ ------------ Property, plant and equipment: Land and improvements...................... 2,158,760 2,123,848 Buildings and improvements................. 9,768,478 9,028,195 Leasehold improvements..................... 4,883,152 4,845,816 Machinery and equipment.................... 22,937,311 17,885,788 ------------ ------------ 39,747,701 33,883,647 Less, Accumulated depreciation and amortization 13,358,616 12,429,136 ------------ ------------ Property, plant and equipment, net.... 26,389,085 21,454,511 Intangible assets, net....................... 2,010,350 2,112,004 Other assets................................. 1,329,214 913,107 ------------ ------------ Total assets.......................... $73,128,248 $62,426,662 ============ ============ The accompanying notes are a part of the consolidated financial statements. Page 3 of 13 Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets, Concluded June 30, December 31, 1996 1995 ------------ ----------- Liabilities and Stockholders' Equity (Unaudited) Current liabilities: Current maturities of long-term debt....... $1,614,758 $2,609,815 Trade accounts payable..................... 6,649,916 6,343,766 Accrued income taxes....................... 1,090,593 138,682 Other accrued liabilities.................. 5,187,775 5,715,879 ------------ ------------ Total current liabilities............. 14,543,042 14,808,142 Long-term debt............................... 23,906,584 18,031,553 Deferred income taxes........................ 784,086 784,086 ------------ ------------ Total liabilities..................... 39,233,712 33,623,781 ------------ ------------ Stockholders' equity: Class A Common Stock, $.10 par value....... 801,274 673,861 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................. 20,849,609 18,911,421 Retained earnings.......................... 12,259,841 9,193,919 Treasury stock, at cost, 13,757 shares of Class A Common Stock.................... (156,486) (156,486) ------------ ------------ Total stockholders' equity............ 33,894,536 28,802,881 ------------ ------------ Total liabilities and stockholders' equity.............................. $73,128,248 $62,426,662 ============ ============ 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 Ended Six Months Ended June 30, June 30, ----------- ----------- ----------- ----------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Revenues..................... $44,057,242 $48,136,419 $82,550,350 $91,805,802 Costs and expenses: Cost of sales.............. 36,314,957 39,365,804 68,974,472 76,771,164 Selling, general and administration........... 3,952,121 3,879,878 7,536,173 7,147,349 Interest................... 247,591 456,332 780,783 939,617 ----------- ----------- ----------- ----------- 40,514,669 43,702,014 77,291,428 84,858,130 ----------- ----------- ----------- ----------- Income before income taxes 3,542,573 4,434,405 5,258,922 6,947,672 Income taxes............... 1,463,000 1,798,000 2,193,000 2,821,000 ----------- ----------- ----------- ----------- Net income............... $2,079,573 $2,636,405 $3,065,922 $4,126,672 =========== =========== =========== =========== Earnings per share: Primary.................. $.23 $.31 $.33 $.49 Fully diluted............ .22 .29 .33 .45 Weighted average number of shares of common stock and common stock equivalents: Primary................... 9,244,531 8,558,960 9,169,649 8,446,920 Fully diluted............. 9,394,936 9,303,600 9,375,591 9,301,657 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) Six Months Ended June 30, ------------ ------------ 1996 1995 ------------ ------------ Cash flows from operating activities: Net income.............................. $3,065,922 $4,126,672 Depreciation and amortization........... 949,593 916,122 Amortization of intangibles and other assets................................ 105,464 101,655 (Gain) loss on disposal of equipment.... 51 (9,250) Changes in operating assets and liabilities........................... (4,734,308) (5,352,118) ------------ ------------- Net cash used in operating activities. (613,278) (216,919) ------------ ------------- Cash flows from investing activities: Additions to property, plant and equipment............................. (5,884,718) (2,573,323) Proceeds from sale of property, plant and equipment......................... 500 9,250 Increase in intangible and other assets. (419,917) --- ------------- ------------ Net cash used in investing activities......................... (6,304,135) (2,564,073) ------------- ------------ Cash flows from financing activities: Proceeds from revolving line of credit and other long-term debt.............. 38,837,849 36,136,666 Repayments of revolving line of credit and other long-term debt.............. (32,823,447) (33,587,542) Proceeds from exercise of stock options and warrants.......................... 891,305 62,289 ------------ ------------ Net cash provided by financing activities.......................... 6,905,707 2,611,413 ------------ ------------ Decrease in cash and cash equivalents..... (11,706) (169,579) Cash and cash equivalents, beginning of period.................................. 106,740 273,720 ------------ ------------ Cash and cash equivalents, end of period.. $95,034 $104,141 ============ ============ Noncash investing and financing activities: Conversion of convertible notes to shares of Class A Common Stock...... 1,134,428 --- Conversion of Class B Common Stock to Class A Common Stock................ 39,868 7,227 Exchange of warrants for Class A Common Stock........................ 3,051,930 --- 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, 1995 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: June 30, December 31, 1996 1995 ------------- ------------- Raw materials................. $ 13,098,256 $ 11,599,585 Work-in-progress.............. 3,157,782 3,113,990 Finished goods................ 6,086,940 5,430,696 ------------- ------------- $ 22,342,978 $ 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, and the credit line was increased from $12.0 million to $14.0 million for all other months of the year. On April 10, 1996, the Company closed on a $3.2 million Industrial Revenue Bond with the California Statewide Communities Development Authority. The proceeds were used to purchase the Company's California manufacturing facility. The variable interest rate bonds are amortized over 15 years. The interest rate (3.8% at the end of June) is determined by the remarketing agent based on comparable tax-exempt obligations. Page 7 of 13 NOTE D - STOCK DIVIDEND On November 29, 1995, the Board of Directors declared a 10% common stock dividend payable on December 22, 1995, to stockholders of record on December 15, 1995. Earnings per share and weighted average shares outstanding for all periods in 1995 have been restated to reflect the 10% stock dividend. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations Revenues for the six months ended June 30, 1996 decreased $9,255,452 to $82,550,350 while revenues for the three months ended June 30, 1996 decreased $4,079,177 to $44,057,242 compared to the corresponding periods in 1995. Net income for the six months ended June 30, 1996 decreased $1,060,750 to $3,065,922 while net income for the three months ended June 30, 1996 decreased $556,832 to $2,079,573. The decrease in revenues was caused by softness in the Company's large Northeastern and Midwestern truck equipment markets as well as a delay in the awarding of a large municipal bus contract normally delivered during this time frame. While there is no assurance the Company will be successful in winning this contract, it is actively pursuing such contract. Revenues were also negatively affected by a decline in fleet orders to large end-users as well as the absence of a significant Government Services Administration contract that did not repeat in 1996. The Company's gross profit percentage declined .6% for the quarter ended June 30, 1996 to 17.6% while gross profit for the six months ended June 30, 1996 was unchanged at 16.4% when compared to the prior year's comparable period. The Company's material cost declined in both the quarter and six months ended June 30, 1996 when compared to the comparable prior year periods. Direct labor and overhead costs increased in both periods completely offsetting the decrease in material cost for the six months ended June 30, 1996 and more than offsetting the decline in material costs for the quarter ended June 30, 1996. Gross profit margins were also affected by expenses relating to the development of the Company's new patented fiberglass reinforced panel ("FRP") facility, and its new Honduras hardwood flooring plant. The Company also incurred costs associated with the start-up of three new distribution centers, the investment in two new major product lines and the move to a new manufacturing plant in California. Page 8 of 13 Selling, general and administrative expenses increased 1.3% to 9.1% from 7.8% for the six months ended June 30, 1996 and increased .9% to 9.0% from 8.1% for the three months ended June 30, 1996. In addition to lower revenues, the increase in the percentage was caused by expansion of the Company's sales force associated with its expanded distribution as well as the development of new literature and the revision of existing literature for the Company's existing and new product lines. The Company's trade show and advertising expenses have also increased in connection with its new literature and expanded product line. The decline in net income for the quarter and six months ended June 30, 1996 was caused by the factors discussed above. Liquidity and Capital Resources Net income and funds available under the Company's revolving credit agreement were sufficient to finance operations and service debt obligations for the six months ended June 30, 1996. Funds available under the Company's revolving credit agreement and a $3.2 million California Industrial Revenue Bond were sufficient to finance capital expenditures for the period ended June 30, 1996. Availability under the Company's revolving credit agreement was $1.4 million at June 30, 1996 (based upon the reduced revolver amount of $14.0 million which became effective July 1, 1996). Proceeds from the exercise of Warrants and stock options were $.9 million during the six months ended June 30, 1996. Prior to the expiration date of the Company's 1993 Callable Warrants on June 9, 1996, 278,687 of such Warrants were exercised for cash, 2,141,705 were exchanged for Class A Common Stock (on a 5 Warrants for 1 Class A Common Share basis) and 60,370 Warrants expired. The ratio of current assets to current liabilities was 3.0 to 1.0 at June 30, 1996. Capital expenditures for the six months ended June 30, 1996 were $5.9 million. The largest expenditure in the period was the $3.5 million acquisition and renovation of a manufacturing facility in Moreno Valley, California. Other major expenditures during the period were for the Company's patented fiberglass reinforced panel ("FRP") machine, the Honduran hardwood flooring plant and the purchase of land and construction of a new distribution facility to service the Louisville - Cincinnati area. The Company believes cash flow from operations and funds available under the Company's revolving credit agreement will be sufficient to finance the balance of 1996 operations and planned capital expenditures. Page 9 of 13 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders Supreme Industries, Inc.'s annual meeting of stockholders was held on May 2, 1996. Below is a summary of matters voted upon at that meeting. a) The following individuals were elected Directors by the holders of the Company's Class A Common Stock by a vote of 4,986,378 to 171,548 with no abstentions: H. Douglas Schrock Rice M. Tilley, Jr. Mr. Rick L. Horn was elected director by the holders of the Company's Class A Common Stock by a vote of 4,982,651 to 175,275 with no abstentions. The following individuals were elected Directors by the holders of the Company's Class B Common Stock by a vote of 1,621,848 to 0 with no abstentions: William J. Barrett Robert J. Campbell Thomas Cantwell Herbert M. Gardner Omer G. Kropf Robert W. Wilson b) Coopers & Lybrand L.L.P. was ratified as the Company's independent auditors by a vote of 6,156,679 to 11,564 with 7,401 abstaining. c) The amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of the Company's Class A Common Stock from 15,000,000 to 20,000,000 passed with 4,930,957 voting for, 210,512 voting against and 16,457 abstaining. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) Exhibits: Exhibit 11-Statement Regarding Computation of Per Share Earnings b) Reports on Form 8-K: None Page 10 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: August 14, 1996 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 11 of 13 INDEX TO EXHIBITS Exhibit No. Description Page 11 Statement Regarding Computation of Per Share Earnings 13 Page 12 of 13 EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS SUPREME INDUSTRIES, INC. AND SUBSIDIARIES (Amounts in thousands, except per share data) Six Months Ended June 30, ------------------------- 1996 1995 ---- ---- PRIMARY Average shares outstanding 8,638 8,159 Net effect of dilutive stock options and warrants - based on the treasury stock method using average market price 474 288 Net effect of subordinated - convertible notes 58 -- ------- ------- TOTAL 9,170 8,447 ======= ======= Net income $ 3,066 $ 4,127 ======= ======= Net income per share $ .33 $ .49 ======= ======= FULLY DILUTED Average shares outstanding 8,638 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 475 531 Net effect of subordinated convertible notes 263 612 ------- ------- TOTAL 9,376 9,302 ======= ======= Net income $ 3,066 $ 4,127 Interest expense reduction due to assumed conversion of subordinated convertible notes - net of tax 23 67 ------- ------- Net income as adjusted $ 3,089 $ 4,194 ======= ======= Net income per share $ .33 $ .45 ======= ======= Note: Share and per share data for 1995 have been restated for the 10% stock dividend declared on November 29, 1995. Page 13 of 13 EX-27 2
5 6-MOS DEC-31-1996 JUN-30-1996 95,034 0 19,992,995 430,000 22,342,978 43,399,599 39,747,701 13,358,616 73,128,248 14,543,042 23,906,584 941,572 0 0 0 73,128,248 82,550,350 82,550,350 68,974,472 68,974,472 7,536,173 0 780,783 5,258,922 2,193,000 3,065,922 0 0 0 3,065,922 0.33 0.33
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