EX-99.1 2 a06-24114_1ex99d1.htm EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Supreme Industries Reports Third-Quarter and Nine-Month 2006 Financial Results

Goshen, Ind.—November 14, 2006—Supreme Industries, Inc. (AMEX: STS), a leading manufacturer of specialized transportation products, including truck bodies and shuttle buses, today announced financial results for the third-quarter and nine-month periods ended September 30, 2006.

The Company generated net sales of $79.7 million for the third quarter of 2006, increasing 3.4 percent from the prior-year third-quarter high of $77.1 million. Net income for the 2006 third quarter of $1.2 million compared with $1.3 million in last year’s third quarter, with diluted earnings per share remaining unchanged at $.10.

Net sales for the first nine months advanced to $264.3 million in 2006 from 2005’s $262.6 million. Net income was $4.2 million, or $.32 per diluted share, versus $7.3 million, or $.57 per diluted share, for the 2005 nine-month period.

The 2006 revenue improvement reflected increased sales of the Company’s core dry freight product line where sales were up for the third quarter and the nine months, versus the respective prior-year periods. This was supported by an increase in sales from the Company’s StarTrans® Bus Division during the most recent nine months, partially offsetting a decrease in fleet sales from levels achieved last year. Sales backlog was $75.4 million at September 30, 2006, versus $69.1 million at 2005’s third-quarter end, an increase of more than nine percent.

Gross profit for the third quarter of 2006 increased 15.7 percent to $9.6 million, or 12.0 percent of net sales, compared with $8.3 million, or 10.7 percent of net sales, for the same quarter last year. For the first nine months of 2006, gross profit decreased 7.5 percent to $29.7 million, versus $32.1 million for the 2005 nine-month period. Gross margin was 11.2 percent of net sales in the current year’s nine-month period, versus 12.2 percent of net sales in last year’s nine months. The gross profit increase for the quarter was primarily due to favorable annual physical inventory adjustments. These adjustments historically have been recorded in the third quarter and resulted in a $1.9 million favorable adjustment this year compared with a $1.1 million unfavorable adjustment last year. Additionally, the Company continued to experience higher raw material costs and increases in its workers compensation costs, repairs and maintenance and utilities, which impacted the financial results.

Supreme Industries, Inc.
2581 East Kercher Road • PO Box 237 • Goshen, IN 46528



Selling, general and administrative (SG&A) expenses were $7.2 million, or 9.0 percent of net sales, in the 2006 third quarter, compared with $6.0 million, or 7.8 percent of net sales, for the same period last year. For the 2006 nine-month period, SG&A expenses were $21.4 million, or 8.1 percent of net sales, compared with $19.7 million, or 7.5 percent of net sales, for the same prior-year period. The increases reflected a reduction in cooperative marketing funds the Company receives from chassis manufacturers, expenses as a result of the February 2006 acquisition of Pony Xpress and the addition of new sales positions to promote the Company’s expanding product line.

Interest expense in the third quarter increased to $.8 million, up from $.5 million for the same period in 2005. For the nine months, interest expense increased to $2.3 million, compared with $1.6 million for same period a year ago. The increases were a result of higher short-term interest rates, finance charges incurred on consigned chassis inventory and, to a lesser extent, additional borrowings.

Stockholders’ equity improved to $75.8 million, or $5.97 per share, at September 30, 2006. At quarter-end, working capital totaled $62.2 million, compared with $60.8 million at last year-end. The working capital ratio at September 30, 2006, was 3.2 to 1, while long-term debt as a percentage of the Company’s total assets was 23.9 percent.

Commenting on the financial results, President Robert W. Wilson said, “We are pleased with the quarter’s strong sales performance; however, when we exclude the positive impact from the physical inventory adjustment, the effect of our previous price increases has yet to be fully realized.

“We have started to see some of the anticipated benefits from pricing adjustments implemented earlier this year, and we expect that margins will improve as we continue to work through the backlog of lower-margin orders. Strategies to mitigate the adverse impact of volatility in raw material costs continue, and we remain committed to reducing their impact as market conditions allow.

“On the volume side of the business, we are optimistic about market-expanding possibilities inherent in our new product offerings.  Among the product expansions and improvements currently being developed is our new high-end StarTrans shuttle bus, which debuted last month to favorable reviews; and our Astro Body, which is Supreme’s joint product-development and marketing project with General Motors.”

Supreme Industries also recently announced a cash dividend on its outstanding Class A and Class B Common Stock. Stockholders of record as of November 13, 2006, will receive $.095 for each share owned on that date, payable on November 20, 2006. This cash dividend is the 13th consecutive quarterly cash dividend since the Company commenced payments of regular cash dividends in October of 2003.

A live webcast of Supreme Industries’ earnings conference call can be heard today, Tuesday, November 14, 2006, at 5:00 p.m. Eastern Time at www.supremeind.com.

Supreme Industries, Inc.
2581 East Kercher Road • PO Box 237 • Goshen, IN 46528



About Supreme
Supreme Industries, Inc. (STS) is a nationwide manufacturer of specialized truck bodies produced to the specifications of its customers. Supreme also manufactures the StarTrans® line of special-purpose “shuttle-type” buses. The Company’s transportation equipment products are used by a wide variety of industrial, commercial, law enforcement and Homeland Security customers.

This report contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), other than historical facts, which reflect the view of the Company’s management with respect to future events. When used in this report, words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” and similar expressions, as they relate to the Company or its plans or operations, identify forward-looking statements. Such forward-looking statements are based on assumptions made by and information currently available to the Company’s management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations are reasonable, and 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, raw material cost increases, and severe interest rate increases. Furthermore, the Company can provide no assurance that such raw material cost increases can be passed on to its customers through implementation of price increases for the Company’s products. The forward-looking statements contained herein reflect the current views of the Company’s management with respect to future events and are subject to those factors and other risks, uncertainties and assumptions relating to the operations, results of operations, cash flows and financial position of the Company. 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.

CONTACT:

Supreme Industries, Inc.

Robert W. Wilson, 574-642-4888
President and Chief Operating Officer

—FINANCIAL TABLES FOLLOW—

Supreme Industries, Inc.
2581 East Kercher Road • PO Box 237 • Goshen, IN 46528



Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

Sept. 30, 2006

 

Sept. 24, 2005

 

Sept. 30, 2006

 

Sept. 24, 2005

 

Revenue:

 

 

 

 

 

 

 

 

 

Net sales

 

$

79,678,398

 

$

77,055,374

 

$

264,289,048

 

$

262,594,085

 

Cost of sales

 

70,122,112

 

68,797,402

 

234,596,119

 

230,464,233

 

Gross profit

 

9,556,286

 

8,257,972

 

29,692,929

 

32,129,852

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative exp.

 

7,171,292

 

5,984,152

 

21,372,025

 

19,736,568

 

Other exp. (income)

 

(202,475

)

(231,583

)

(406,566

)

(531,801

)

 

 

 

 

 

 

 

 

 

 

Operating income

 

2,587,469

 

2,505,403

 

8,727,470

 

12,925,085

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

760,108

 

510,595

 

2,295,693

 

1,567,628

 

Income before income taxes

 

1,827,361

 

1,994,808

 

6,431,777

 

11,357,457

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

585,000

 

709,000

 

2,251,000

 

4,077,000

 

Net income

 

$

1,242,361

 

$

1,285,808

 

$

4,180,777

 

$

7,280,457

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

.10

 

$

.10

 

$

.33

 

$

.59

 

Diluted

 

.10

 

.10

 

.32

 

.57

 

 

 

 

 

 

 

 

 

 

 

Shares used in the computation of EPS:

 

 

 

 

 

 

 

 

 

Basic

 

12,702,632

 

12,561,453

 

12,701,639

 

12,379,668

 

Diluted

 

12,835,523

 

12,948,791

 

12,888,703

 

12,792,411

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

.095

 

$

.095

 

$

.285

 

$

.165

 

 

Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets

 

 

Sept. 30, 2006

 

Dec. 31, 2005

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets

 

$

89,886,986

 

$

88,609,777

 

Property, plant and equipment, net

 

48,149,186

 

47,457,713

 

Intangible assets, net

 

1,460,569

 

735,014

 

Other assets

 

621,003

 

549,350

 

Total assets

 

$

140,117,744

 

$

137,351,854

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

$

27,684,683

 

$

27,819,756

 

Long-term debt

 

33,538,950

 

31,378,367

 

Deferred income taxes

 

3,053,275

 

2,988,275

 

 

 

 

 

 

 

Total liabilities

 

64,276,908

 

62,186,398

 

Total stockholders’ equity

 

75,840,836

 

75,165,456

 

Total liabilities and stockholders’ equity

 

$

140,117,744

 

$

137,351,854

 

 

###

Supreme Industries, Inc.
2581 East Kercher Road • PO Box 237 • Goshen, IN 46528