-----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, V8YL6p1u6GSQqHTYSdV/vD1ej8Tf2q54edfYhx6racI3JXmMSeVbCKtoCG2zk6fd 2zUJKLJbYBFBn7pzkfJdOg== 0000350846-97-000008.txt : 19970813 0000350846-97-000008.hdr.sgml : 19970813 ACCESSION NUMBER: 0000350846-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970812 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: 97656490 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, 1997 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 August 6, 1997 Class A 8,428,226 Class B 1,473,124 The index to Exhibits is at page 13 in the sequential numbering system. Total number of pages: 14. Page 1 of 14 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 & 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8 11 Signatures 12 Index to Exhibits 13 Page 2 of 14 Part I. Financial Information Item 1. Financial Statements Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets June 30, December 31, 1997 1996 ------------ ------------ Assets (Unaudited) Current assets: Cash and cash equivalents................ $208,526 $220,678 Accounts receivable, net................. 21,936,889 16,556,258 Inventories.............................. 22,289,972 21,208,707 Deferred income taxes.................... 1,043,066 1,043,066 Other current assets..................... 445,345 423,237 ------------ ------------ Total current assets.................. 45,923,798 39,451,946 ------------ ------------ Property, plant and equipment, at cost..... 42,431,671 40,675,873 Less, Accumulated depreciation and amortization........................ 15,399,305 14,246,236 ------------ ------------ Property, plant and equipment, net.... 27,032,366 26,429,637 Intangible assets, net..................... 1,807,040 1,908,694 Other assets............................... 1,047,604 1,038,747 ------------ ------------ Total assets.......................... $75,810,808 $68,829,024 ============ ============ The accompanying notes are a part of the consolidated financial statements. Page 3 of 14 Supreme Industries, Inc. and Subsidiaries Consolidated Balance Sheets, Concluded June 30, December 31, 1997 1996 ------------ ------------ Liabilities and Stockholders' Equity (Unaudited) Current liabilities: Current maturities of long-term debt...... $2,376,864 $2,355,955 Trade accounts payable.................... 8,246,609 6,778,942 Accrued income taxes...................... 884,240 959,240 Other accrued liabilities................. 6,179,291 5,914,315 ------------ ------------ Total current liabilities.............. 17,687,004 16,008,452 Long-term debt.............................. 16,344,766 16,108,780 Deferred income taxes....................... 890,234 890,234 ------------ ------------ Total liabilities...................... 34,922,004 33,007,466 ------------ ------------ Stockholders' equity: Class A Common Stock, $.10 par value...... 842,823 801,277 Class B Common Stock, convertible into Class A Common Stock on a one-for-one basis, $.10 par value................... 147,312 140,297 Additional paid-in capital................ 27,289,356 23,901,587 Retained earnings......................... 12,859,849 11,228,933 Treasury stock, at cost................... (250,536) (250,536) ------------ ------------ Total stockholders' equity............. 40,888,804 35,821,558 ------------ ------------ Total liabilities and stockholders' equity............................... $75,810,808 $68,829,024 ============ ============ The accompanying notes are a part of the consolidated financial statements. Page 4 of 14 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------ ------------- ------------ ------------- 1997 1996 1997 1996 ------------ ------------- ------------ ------------- Revenues............... $56,275,903 $44,057,242 $100,449,206 $82,550,350 Costs and expenses: Cost of sales........ 45,879,498 36,314,957 82,916,179 68,974,472 Selling, general and administrative..... 4,469,788 3,952,121 8,419,166 7,536,173 Interest............. 413,380 247,591 763,225 780,783 ------------ ------------ ------------ ------------ 50,762,666 40,514,669 92,098,570 77,291,428 ------------ ------------ ------------ ------------ Income before income taxes.... 5,513,237 3,542,573 8,350,636 5,258,922 Income taxes........... 2,182,000 1,463,000 3,334,000 2,193,000 ------------ ------------ ------------ ------------ Net income........ $3,331,237 $2,079,573 $5,016,636 $3,065,922 ============ ============ ============ ============ Earnings per share: Primary........... $.34 $.21 $.51 $.32 Fully diluted..... .33 .21 .50 .31 Weighted average number of shares of common stock and common stock equivalents: Primary.......... 9,933,359 9,706,758 9,925,472 9,628,131 Fully diluted.... 9,948,567 9,864,683 9,946,993 9,844,371 The accompanying notes are a part of the consolidated financial statements. Page 5 of 14 Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, ------------ ------------ 1997 1996 ------------ ------------ Cash flows from operating activities: Net income...................................... $5,016,636 $3,065,922 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization............... 1,298,040 949,593 Amortization of intangibles and other assets.................................... 101,654 105,464 Loss on disposal of equipment............... 11,094 51 Changes in operating assets and liabilities. (4,826,361) (4,734,308) ------------ ----------- Net cash provided by (used in) operating activities.................................. 1,601,063 (613,278) ------------ ----------- Cash flows from investing activities: Additions to property, plant and equipment...... (1,965,013) (5,884,718) Proceeds from disposal of property, plant and equipment..................................... 53,150 500 Increase in other assets........................ (8,857) (419,917) ------------ ----------- Net cash (used in) investing activities....... (1,920,720) (6,304,135) ------------ ----------- Cash flows from financing activities: Proceeds from revolving line of credit and other long-term debt.......................... 40,163,003 38,837,849 Repayments of revolving line of credit and other long-term debt.......................... (39,906,108) (32,823,447) Proceeds from exercise of stock options and warrants...................................... 50,610 891,305 ------------ ------------ Net cash provided by financing activities..... 307,505 6,905,707 ------------ ------------ Decrease in cash and cash equivalents............. (12,152) (11,706) Cash and cash equivalents, beginning of period.... 220,678 106,740 ------------ ------------ Cash and cash equivalents, end of period.......... $208,526 $95,034 ============ ============ Noncash investing and financing activities: 5% Common Stock Dividend........................ $3,385,720 $ ---- 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 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 14 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, 1996 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, 1997 1996 ------------ ------------ Raw materials.............. $ 12,400,031 $ 12,076,089 Work-in-progress........... 3,138,669 3,138,668 Finished goods............. 6,751,272 5,993,950 ------------ ------------ $ 22,289,972 $ 21,208,707 ============ ============ 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 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 rates for the three and six months ended June 30, 1997 were 39.6% and 39.9%, respectively, compared to 41.3% and 41.7% for the three and six months ended June 30, 1996. The decreases are attributable to the Company's higher levels of income decreasing the impact of items treated differently for financial statement purposes and income tax return purposes and improved operations of the Company's Honduran subsidiary, which is operating in a government tax free zone. Page 7 of 14 NOTE D - STOCK DIVIDEND - ----------------------- On May 1, 1997, the Board of Directors declared a 5% common stock dividend payable on May 19, 1997, to shareholders of record on May 12, 1997. Earnings per share and weighted average shares outstanding have been restated to reflect the 5% stock dividend for all periods presented. NOTE E - RECENT ACCOUNTING PRONOUNCEMENTS - ----------------------------------------- In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." The Company is required to initially adopt this pronouncement during its quarter ending December 31, 1997, and will be required to then restate all prior periods presented to conform with the new standard. SFAS No. 128 will require the Company to make a dual presentation of basic and diluted earnings per share on the face of its consolidated statement of income instead of primary and fully diluted earnings per share. The Company has not determined the impact SFAS No. 128 will have on historically reported earnings per share. In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" both of which the Company will be required to adopt in its financial statements for the year ending December 31, 1999. SFAS No. 130 will require the Company to report comprehensive income in its financial statements. Comprehensive income includes net income and certain transactions that are reported as a separate component of stockholder's equity. SFAS No. 131 specifies revised guidelines for determining operating segments and the type and level of information to be disclosed. The Company has not yet determined what changes in its disclosures, if any, will be required by SFAS No. 131. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ----------------------------------------------------------------------- RESULTS OF OPERATIONS. - ---------------------- Results of Operations - --------------------- Revenues for the three months ended June 30, 1997 increased $12.2 million to $56.3 million from $44.1 million for the three months ended June 30, 1996. Revenues for the six months ended June 30, 1997 increased $17.9 million to $100.4 million from $82.6 million for the six months ended June 30, 1996. Page 8 of 14 Net income for the three months ended June 30, 1997 increased to $3.3 million from $2.1 million for the three months ended June 30, 1996, while net income for the six months ended June 30, 1997 increased to $5.0 million from $3.1 million for the six months ended June 30, 1996. Fully diluted earnings per share for the three months ended June 30, 1997 was $.33, while fully diluted earnings per share was $.50 for the six months ended June 30, 1997. The comparable prior year results were $.21 for the three months ended June 30, 1996 and $.31 for the six months ended June 30, 1996 an increase of $.12 and $.19, respectively. Earnings per share for all periods presented have been restated to reflect the 5% stock dividend paid to shareholders of record on May 12, 1997. Revenue increases for both the three months and six months ended June 30, 1997 were largely concentrated in the Company's dry freight product lines which increased 25.2% and 21.4% for the three months and six months, respectively. The Company's StarTrans (trademark) bus products increased 47.1% and 31% for the three months and six months ended June 30, 1997 over the comparable prior year periods. The Company's Indiana and Pennsylvania facilities were responsible for the largest regional revenue increases. The Company's other regions also shared increases over the comparable prior year periods. The Company's gross profit increased to 18.5% and 17.5% for the three months and six months ended June 30, 1997, respectively, from 17.6% and 16.4% for the comparable prior year periods. The Company's raw material cost as a percentage of revenues increased slightly (less than 1%) for both the three months and six months ended June 30, 1997 from the comparable prior year periods. The Company's direct labor cost as a percentage of revenues was unchanged in the three months ended June 30, 1997 and only slightly down for the six months ended June 30, 1997. The Company's overhead expenses declined 1.6% and 1.4% as a percentage of revenues for the three months and six months ended June 30, 1997, respectively. Contributing to the decline in overhead in both periods were those expenses that either do not fluctuate or do not fluctuate proportionately with increases in revenues. Selling, general and administrative expenses as a percentage of revenues declined to 7.9% and 8.4% for the three months and six months ended June 30, 1997, respectively, from 9.0% and 9.1% for the comparable prior year periods. The actual dollar comparisons show an increase of $.5 million and $.9 million for the three months and six months ended June 30, 1997, respectively. Contributing to the dollar increase were the Company's additional distribution facilities that were in operation for the full period in 1997 and only for a portion of the six months ended June 30, 1996. Also contributing to the dollar increase were those items that fluctuate proportionately with revenues. Interest expense for the three months and six months ended June 30, 1997 was $.4 million or .7% of revenues and $.8 million or .8% of revenues, respectively. The comparable prior year amounts were $.2 million or .6% of revenues and $.8 million or .9% of revenues for the three months and six months periods ended June 30, 1996, respectively. Interest expense in the 1996 periods was reduced by $.2 million of interest that was capitalized in accordance with Statement of Financial Accounting Standards No. 34. Page 9 of 14 The Company recently completed a computer hardware and software selection process which was necessitated by the inability of the present system to handle the year 2000, the need for improved technology to process the continuing increased volume of transactions and the need for improved information reporting. The Company has selected a vendor and has begun the initial planning for the conversion and implementation of new operating software. The Company believes the new operating software will be implemented successfully in advance of the year 2000 requirements. Liquidity and Capital Resources - ------------------------------- Cash flows from operations and funds available under the Company's revolving credit agreement were adequate to finance operations and provide for capital expenditures during the six months ended June 30, 1997. Net income of $5.0 million combined with depreciation and amortization of $1.4 million were the significant factors contributing to cash flows. Cash flow provided by operating activities was $1.6 million for the six months ended June 30, 1997 while $.6 million was used in operating activities for the six months ended June 30, 1996. In both periods operating cash was used to finance increasees in accounts receivable and inventories relative to the increased volume the Company normally experiences in its second quarter. The major investing activities during the six months ended June 30, 1997 were the construction of and equipment for a new paint facility in Goshen, Indiana; production tooling for proprietary parts and improved laminating capabilities; and improved production and paint capabilities in Jonestown, Pennsylvania. The only significant financing activity during the quarter was the use of the Company's revolving credit facility. Net cash provided by financing activities was $.3 million for the six months ended June 30, 1997 compared to $6.9 million in the prior year period which included $3.2 million for the purchase of the California manufacturing facility. The Company anticipates that cash flows from operations and amounts available under its revolving line of credit will be sufficient to meet the Company's cash needs during 1997. Page 10 of 14 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 April 29, 1997. 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 6,010,562 to 19,273 with no abstentions: H. Douglas Schrock Rice M. Tilley, Jr. Rick L. Horn The following individuals were elected Directors by the holders of the Company's Class B Common Stock by a vote of 1,402,975 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 7,401,060 to 32,266 with 17,757 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 11 of 14 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 6, 1997 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 14 INDEX TO EXHIBITS Exhibit No. Description Page - ----------- ----------- ---- 11 Statement Regarding Computation of Per Share Earnings 14 Page 13 of 14 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, ---------------------- 1997 1996 ------ ------ PRIMARY Weighted average shares outstanding 9,863 9,070 Net effect of dilutive stock options and warrants - based on the treasury stock method using average market price 62 497 Net effect of subordinated convertible notes -- 61 ------- ------- TOTAL 9,925 9,628 ======= ======= Net income $ 5,017 $ 3,066 ======= ======= Net income per share $ .51 $ .32 ======= ======= FULLY DILUTED Weighted average shares outstanding 9,863 9,070 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 84 497 Dilutive effect of subordinated convertible notes -- 277 ------- ------- TOTAL 9,947 9,844 ======= ======= Net income $ 5,017 $ 3,066 Interest expense reduction due to assumed conversion of subordinated convertible notes - net of tax -- 23 ------- ------- Net income as adjusted $ 5,017 $ 3,089 ======= ======= Net income per share $ .50 $ .31 ======= ======= Note: The above share and per share data have been restated for the 5% stock dividend declared on May 1, 1997. Page 14 of 14 EX-27 2
5 6-MOS DEC-31-1997 JUN-30-1997 208,526 0 22,366,889 430,000 22,289,972 45,923,798 42,431,671 15,399,305 75,810,808 17,687,004 16,344,766 990,135 0 0 0 75,810,808 100,449,206 100,449,206 82,916,179 82,916,179 8,419,166 0 763,225 8,350,636 3,334,000 5,016,636 0 0 0 5,016,636 0.51 0.50
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