0001104659-17-030080.txt : 20170505 0001104659-17-030080.hdr.sgml : 20170505 20170505084009 ACCESSION NUMBER: 0001104659-17-030080 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 41 CONFORMED PERIOD OF REPORT: 20170401 FILED AS OF DATE: 20170505 DATE AS OF CHANGE: 20170505 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: 17816241 BUSINESS ADDRESS: STREET 1: P O BOX 463 STREET 2: 2581 EAST KERCHER ROAD CITY: GOSHEN STATE: IN ZIP: 46528 BUSINESS PHONE: 5746423070 MAIL ADDRESS: STREET 1: P O BOX 463 STREET 2: 2581 EAST KERCHER ROAD CITY: GOSHEN STATE: IN ZIP: 46528 FORMER COMPANY: FORMER CONFORMED NAME: EXPLORATION SURVEYS INC DATE OF NAME CHANGE: 19850813 10-Q 1 a17-8904_110q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

(Mark One)

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended April 1, 2017

 

or

 

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from          to        

 

Commission File Number: 1-8183

 

SUPREME INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

75-1670945

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

2581 E. Kercher Rd., Goshen, Indiana 46528

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code:  (574) 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  o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   x   No  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer

o

 

Accelerated filer

x

 

Non-accelerated filer

o

 

(Do not check if a smaller reporting company)

 

Smaller reporting company

o

 

Emerging growth company

o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes    o   No    x

 

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 April 25, 2017

Class A

 

15,499,507

Class B

 

1,656,467

 

 

 



Table of Contents

 

SUPREME INDUSTRIES, INC.

TABLE OF CONTENTS

 

 

 

Page No.

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

ITEM 1.

Financial Statements.

 

 

 

 

 

Condensed Consolidated Balance Sheets (Unaudited).

3

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited).

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited).

5

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited).

6

 

 

 

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

11

 

 

 

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk.

18

 

 

 

ITEM 4.

Controls and Procedures.

18

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

ITEM 1.

Legal Proceedings.

19

 

 

 

ITEM 1A.

Risk Factors.

19

 

 

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

19

 

 

 

ITEM 3.

Defaults Upon Senior Securities.

19

 

 

 

ITEM 4.

Mine Safety Disclosures.

19

 

 

 

ITEM 5.

Other Information.

19

 

 

 

ITEM 6.

Exhibits.

20

 

 

 

SIGNATURES

 

 

 

INDEX TO EXHIBITS

 

 

 

EXHIBITS

 

 

2



Table of Contents

 

PART I. FINANCIAL INFORMATION

 

ITEM 1.                FINANCIAL STATEMENTS.

 

SUPREME INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

April 1,

 

December 31,

 

 

 

2017

 

2016

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

5,379,472

 

$

35,222,620

 

Investments

 

4,110,156

 

3,003,002

 

Accounts receivable, net

 

33,869,415

 

20,106,253

 

Inventories

 

41,971,770

 

24,245,322

 

Other current assets

 

5,463,816

 

5,644,154

 

Total current assets

 

90,794,629

 

88,221,351

 

 

 

 

 

 

 

Property, plant and equipment, net

 

45,523,946

 

45,747,933

 

Total assets

 

$

136,318,575

 

$

133,969,284

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

7,104,666

 

$

7,195,105

 

Trade accounts payable

 

13,885,164

 

6,803,769

 

Other accrued liabilities

 

10,155,251

 

16,057,283

 

Total current liabilities

 

31,145,081

 

30,056,157

 

 

 

 

 

 

 

Deferred income taxes

 

2,354,401

 

2,181,778

 

Total liabilities

 

33,499,482

 

32,237,935

 

 

 

 

 

 

 

Stockholders’ equity

 

102,819,093

 

101,731,349

 

Total liabilities and stockholders’ equity

 

$

136,318,575

 

$

133,969,284

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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SUPREME INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (UNAUDITED)

 

 

 

Three Months Ended

 

 

 

April 1,

 

March 26,

 

 

 

2017

 

2016

 

 

 

 

 

 

 

Net sales

 

$

68,674,699

 

$

69,449,903

 

Cost of sales

 

55,678,922

 

54,289,246

 

Gross profit

 

12,995,777

 

15,160,657

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

10,051,472

 

9,414,951

 

Other income

 

(69,480

)

(36,476

)

Operating income

 

3,013,785

 

5,782,182

 

 

 

 

 

 

 

Interest expense

 

245,403

 

182,829

 

Income before income taxes

 

2,768,382

 

5,599,353

 

 

 

 

 

 

 

Income tax expense

 

905,397

 

1,840,000

 

Net income

 

1,862,985

 

3,759,353

 

 

 

 

 

 

 

Other comprehensive income, net of tax

 

21,268

 

32,090

 

Comprehensive income

 

$

1,884,253

 

$

3,791,443

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

Basic

 

$

0.11

 

$

0.23

 

Diluted

 

0.11

 

0.22

 

 

 

 

 

 

 

Shares used in the computation of income per share:

 

 

 

 

 

Basic

 

17,099,107

 

16,682,812

 

Diluted

 

17,101,080

 

17,127,836

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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SUPREME INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Three Months Ended

 

 

 

April 1,

 

March 26,

 

 

 

2017

 

2016

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

1,862,985

 

$

3,759,353

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

Depreciation and amortization

 

838,351

 

872,358

 

Deferred income taxes

 

172,623

 

(300,350

)

Stock-based compensation expense

 

288,607

 

227,386

 

Gain on sale of property, plant and equipment, net

 

(7,738

)

(300

)

Changes in operating assets and liabilities

 

(25,002,928

)

(9,382,120

)

 

 

 

 

 

 

Net cash used in operating activities

 

(21,848,100

)

(4,823,673

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Additions to property, plant and equipment

 

(539,046

)

(399,324

)

Proceeds from sale of property, plant and equipment

 

8,650

 

300

 

Purchases of investments

 

(1,088,737

)

(23,560

)

 

 

 

 

 

 

Net cash used in investing activities

 

(1,619,133

)

(422,584

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Repayments of current maturities of long-term debt

 

(166,669

)

(166,667

)

Payment of cash dividends

 

(5,724,469

)

(5,572,859

)

Treasury stock purchased

 

(522,687

)

(161,769

)

Proceeds from exercise of stock options

 

37,910

 

12,400

 

 

 

 

 

 

 

Net cash used in financing activities

 

(6,375,915

)

(5,888,895

)

 

 

 

 

 

 

Change in cash and cash equivalents

 

(29,843,148

)

(11,135,152

)

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

35,222,620

 

17,247,891

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

5,379,472

 

$

6,112,739

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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SUPREME INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 — BASIS OF PRESENTATION AND OPINION OF MANAGEMENT

 

The accompanying unaudited condensed 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 accounting principles generally accepted in the United States of America.  In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair presentation of the interim periods reported.  The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  References to “we,” “us,” “our,” “its,” “Supreme,” or the “Company” refer to Supreme Industries, Inc. and its subsidiaries.

 

The Company has adopted a 52- or 53-week fiscal year ending the last Saturday in December.  The results of operations for the three months ended April 1, 2017 and March 26, 2016 are for 13-week periods.

 

NOTE 2 — INVENTORIES

 

Inventories, which are stated at the lower of cost or market with cost determined using the first-in, first-out method, consist of the following, net of applicable reserves of $1.2 million and $1.1 million as of April 1, 2017 and December 31, 2016, respectively:

 

 

 

April 1,

 

December 31,

 

 

 

2017

 

2016

 

Raw materials

 

$

29,862,338

 

$

17,404,606

 

Work-in-progress

 

5,288,096

 

3,397,225

 

Finished goods

 

6,821,336

 

3,443,491

 

 

 

$

41,971,770

 

$

24,245,322

 

 

NOTE 3 — FAIR VALUE MEASUREMENT

 

Generally accepted accounting principles (“GAAP”) define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The standard describes three levels of inputs that may be used to measure fair value:

 

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

 

Level 2: Significant other observable inputs (other than Level 1 prices such as quoted prices for similar assets or liabilities); quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

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The Company used the following methods and significant assumptions to estimate the fair value of items:

 

Investments:  The fair values of investments available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).

 

Derivatives:  Our derivative instruments consist of an interest rate swap, currently reflected as other accrued liabilities on the Condensed Consolidated Balance Sheets. The Company obtains fair values from financial institutions that utilize internal models with observable market data inputs to estimate the fair value of these instruments (Level 2 inputs).

 

The carrying amounts of cash and cash equivalents, accounts receivable, and trade accounts payable approximated fair value as of April 1, 2017 and December 31, 2016, because of the relatively short maturities of these financial instruments. The carrying amount of current maturities of long-term debt approximated fair value as of April 1, 2017 and December 31, 2016, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt.

 

NOTE 4 — DEBT

 

Credit Agreement

 

On December 19, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). Under the terms of the Credit Agreement, Wells Fargo agreed to provide to the Company a credit facility of up to $45.0 million, consisting of a revolving credit facility, a term loan facility, and a letter of credit facility.  The Company had unused credit capacity of $35.0 million at April 1, 2017. Interest on outstanding borrowings under the Credit Agreement is based on Wells Fargo’s prime rate or LIBOR depending on the pricing option selected and the Company’s leverage ratio (as defined in the Credit Agreement) resulting in an effective interest rate of 3.06% at April 1, 2017 and 3.05% at December 31, 2016.  Pursuant to the Credit Agreement, the financial covenants include a consolidated total leverage ratio, a consolidated fixed charge coverage ratio, a limitation on annual capital expenditures, and a limitation on quarterly cash dividends. As of April 1, 2017 and December 31, 2016, the Company was in compliance with all financial covenants. The Credit Agreement is for a period of five years ending on December 19, 2017.  The Company expects to enter into a new credit agreement before the Credit Agreement expires.

 

Revolving Credit Facility

 

The revolving credit facility provides for borrowings of up to $35.0 million. The revolving credit facility bears interest at (i) LIBOR plus a margin which varies from 1.50% to 2.50% based upon a leverage ratio of total indebtedness to trailing four quarter EBITDA or (ii) the higher of (a) the prime rate and (b) the federal funds rate plus 0.50% plus a margin which varies from 0.50% to 1.50% based upon the debt to EBITDA leverage ratio. The revolving credit facility also requires a quarterly commitment fee ranging from 0.20% to 0.50% per annum depending on the Company’s financial ratios and based upon the average daily unused portion.  As of April 1, 2017, and December 31, 2016, there were no borrowings against the revolving credit facility.

 

Term Loan Facility

 

The term loan facility provides for borrowings of up to $10.0 million. The term loan is secured by real estate and improvements, payable in quarterly installments of $166,667 commencing on June 28, 2013, plus interest at prime rate or LIBOR, with the remaining balance due upon maturity on December 19, 2017. As of April 1, 2017 and December 31, 2016, the outstanding balance under the term loan facility was $7.3 million and $7.5 million, respectively.

 

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On August 9, 2013, the Company entered into an interest rate swap agreement for a portion of the term loan with a notional amount of $5.0 million. The interest rate swap agreement provides for a 3.1% fixed interest rate and matures on December 19, 2017. The Company designated this swap agreement as a cash flow hedge on its variable rate debt and records the fair value of the swap agreement as an asset or liability on the balance sheet, with changes in fair value recognized in other comprehensive income (loss).

 

Letter of Credit Facility

 

Outstanding letters of credit, related to the Company’s workers’ compensation insurance policies, reduce available borrowings under the Credit Agreement. During 2014, the Company replaced all outstanding letters of credit with cash deposits with its insurance carriers. As of April 1, 2017 and December 31, 2016, cash deposits with insurance carriers totaled $1.9 million.

 

NOTE 5 — STOCK-BASED COMPENSATION

 

The following table summarizes the activity for the outstanding stock options for the three months ended April 1, 2017:

 

 

 

 

 

Weighted - Average

 

 

 

Options

 

Exercise Price

 

Outstanding, December 31, 2016

 

17,850

 

$

2.12

 

Exercised

 

(17,850

)

$

2.12

 

Outstanding, April 1, 2017

 

 

 

 

 

The following table summarizes the activity for the unvested restricted stock for the three months ended April 1, 2017:

 

 

 

Unvested

 

Weighted - Average

 

 

 

Restricted

 

Grant Date

 

 

 

Stock

 

Fair Value

 

Unvested, December 31, 2016

 

129,666

 

$

8.12

 

Granted

 

77,495

 

$

19.54

 

Vested

 

(24,130

)

$

9.06

 

Forfeited

 

 

$

 

Unvested, April 1, 2017

 

183,031

 

$

12.83

 

 

The total fair value of restricted shares vested and recognized as stock-based compensation expense during the three months ended April 1, 2017 was $218,607.

 

As a part of annual director compensation, a stock award is paid to each of the Company’s outside directors equal to $40,000 divided by the closing sales price on the grant date. The grants are made in quarterly increments. The director stock-based compensation expense recognized during the three months ended April 1, 2017 was $70,000.

 

Total unrecognized compensation expense related to all share-based awards outstanding at April 1, 2017, was approximately $2.3 million and is to be recorded over a weighted-average contractual life of 2.4 years.

 

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On May 25, 2016, the Company held its annual meeting of stockholders at which the Company’s stockholders approved the 2016 Long-Term Incentive Plan (the “Plan”) which had previously been approved by the Board of Directors and recommended to the stockholders. The Plan is effective until May 25, 2026; provided, however, any awards issued prior to the Plan’s termination will remain outstanding in accordance with their terms. The Plan authorizes the issuance of 1,000,000 shares of the Company’s Class A Common Stock with certain officers being limited to receiving grants of 100,000 shares in any one year. Employees, contractors and non-employee directors of the Company and its subsidiaries are eligible to receive awards under the Plan. The following types of awards may be granted under the Plan:  (1) stock options (incentive and non-qualified); (2) stock appreciation rights; (3) restricted stock and restricted stock units; (4) dividend equivalent rights; (5) performance awards based on achieving specified performance goals; and (6) other awards. As of April 1, 2017, shares reserved for the granting of future share-based awards totaled 913,731, compared to 1,012,140 shares at December 31, 2016.

 

NOTE 6 — INCOME TAXES

 

For the three months ended April 1, 2017, the Company recorded income tax expense of $0.9 million at an effective tax rate of 32.7% compared with $1.8 million at an effective tax rate of 32.9% for the three months ended March 26, 2016.  The rates differ from the federal statutory rate primarily because of varying state income tax rates and permanent federal income tax differences including benefits from a captive insurance company and the allowable domestic manufacturer deduction.

 

NOTE 7 — COMMON STOCK

 

The Company declared and paid a three and one-half cents ($ 0.035) per share cash dividend to all Class A and Class B common stockholders during the quarter ended April 1, 2017.  The Company also paid a thirty cents ($0.30) per share dividend declared on November 9, 2016, during the quarter ended April 1, 2017. The dividend declared on November 9, 2016 consisted of a special dividend of twenty six and one-half cents ($0.265) per share, in addition to a regular quarterly dividend of three and one-half cents ($0.035) per share.

 

NOTE 8 — SALE OF TROLLEY BUSINESS

 

On May 11, 2016, the Company entered into an Asset Purchase Agreement for the sale of certain assets of the Company’s trolley business. Trolley products represented less than 1% of the Company’s consolidated net sales for the first three months of 2017 and approximately 2% for the first three months of 2016.  The after-tax impact on consolidated operations for both periods was immaterial.  The first stage of the transaction closed on June 30, 2016 and the final stage of the transaction is scheduled to close in the second quarter of 2017.  The Company anticipates no material gain or loss will be recognized on the sale.  The sale of the trolley business does not meet the criteria of the Financial Accounting Standards Board (“FASB”) ASU 2014-8 (Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity) and will not be reported as discontinued operations.

 

NOTE 9 — COMMITMENTS AND CONTINGENCIES

 

The Company is subject to various investigations, claims, and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, certain of which are covered in whole or in part by insurance.  The Company establishes accruals for these matters to the extent that losses are deemed probable and are reasonably estimable.  Although the outcome of these matters cannot be fully determined on the basis of information currently available, it is the opinion of management that the ultimate outcome of these matters would not be significant to the Company’s consolidated financial position, results of operations, or cash flow.

 

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On January 3, 2017, an amended complaint was filed against the Company’s subsidiary, Supreme Corporation, in a suit (SVI, Inc. v. Supreme Corporation, Hometown Trolley (a/k/a Double K, Inc.) and Dustin Pence) in the United States District Court, District of Nevada.  The amended complaint (original complaint filed on May 16, 2016), filed by Supreme Corporation’s former trolley distributor, alleges that Supreme Corporation’s sale of its trolley assets to another trolley manufacturer was improper.  Claims alleged against Supreme Corporation include: (i) misappropriation of trade secrets; (ii) civil conspiracy/collusion; (iii) tortious interference with contractual relationships; (iv) tortious interference with prospective economic advantage; (v) unjust enrichment; (vi) breach of contract; (vii) breach of the covenant of good faith and fair dealing; (viii) breach of fiduciary duties; (ix) promissory estoppel; (x) declaratory relief establishing a joint venture or partnership; and (xi) cancellation of a trademark registration.  The plaintiff alleges that the net present value of the amount lost by the plaintiff is approximately $40,000,000.  Supreme Corporation has filed a motion to dismiss which is pending.  Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.

 

On November 4, 2016, a putative class action lawsuit was filed against the Company, Mark Weber (the Company’s Chief Executive Officer) and Matthew W. Long (the Company’s Chief Financial Officer) in the United States District Court for the Central District of California alleging the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 by making material, misleading statements in July 2016 regarding projected backlog.  The plaintiff seeks to recover unspecified damages.  On February 14, 2017, the court transferred the venue of the case to the Northern District of Indiana upon the joint stipulation of the plaintiff and the defendants.  An amended complaint was filed on April 24, 2017 challenging statements made during a putative class period of October 22, 2015 through October 21, 2016.  Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.

 

NOTE 10 — RECENTLY ISSUED ACCOUNTING PRONOUCEMENTS

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 (as updated by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20) is for annual periods, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for years beginning after December 15, 2016, to be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effects of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position, however, this new accounting guidance may require enhanced footnote disclosures.  The Company will adopt the accounting standard during the first quarter of 2018 as required, but has not yet decided on a transition method.

 

In February 2016, the FASB issued ASU 2016-02, Leases.  The ASU provides guidance that will require an entity to recognize lease assets and lease liabilities on its balance sheet for leases in excess of one year that were previously classified as operating leases under U.S. GAAP. The guidance also requires companies to disclose in the footnotes to the financial statements information about the amount, timing, and uncertainty of the payments made for the lease agreements. The guidance is effective for financial statements issued for annual and interim periods beginning after December 15, 2018 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position.

 

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ITEM 2.                                                MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following discussion should be read in conjunction with the consolidated financial statements and related notes thereto (see Note 1 “Basis of Presentation and Opinion of Management”) located in Item 1 of this document.

 

Company Overview

 

Supreme Industries, Inc., through its wholly-owned subsidiary, Supreme Corporation, is a leading manufacturer of specialized commercial vehicles including truck bodies and specialty vehicles.  Established in 1974 and based in Goshen, Indiana, the Company has operations nationwide at seven manufacturing and component locations.  In order to serve major geographic markets, these operations are positioned at strategic locations across the continental United States.  The Company’s significant brand recognition has a 40-plus-year heritage and offers a complete line of multi-purpose truck bodies.  Customers include national rental fleets, national and regional leasing companies, truck dealers and fleet operators.  With shipments of more than 20,000 truck bodies annually, the Company offers extensive pool chassis programs with leading light-duty original equipment manufacturers.

 

Supreme’s extensive truck body product lines include dry-freight, service, refrigerated, and platform/stake bodies. Most of the Company’s products are attached to light-duty and medium-duty truck chassis.  Supreme integrates a wide range of options into its truck bodies including liftgates, cargo-handling equipment, customized doors, special bumpers, ladder racks, and refrigeration equipment.  Specialty vehicles are designed and customized to move money, dispatch a tactical force, or respond to an emergency to meet many proactive and security needs of its customers.

 

With a nationwide footprint with seven facilities, the Company’s flexible manufacturing systems support high volume fleets and low volume custom products.  Since 2012, the Company has invested more than $25 million in equipment and facilities including building additions, redesigned plant layouts, lean initiatives, and the application of computer-aided design software.

 

The Company and its product offerings are affected by various risk factors which include, but are not limited to, economic conditions, interest rate fluctuations, volatility in the supply chain of chassis, and the availability of credit and financing to the Company, our vendors, dealers, or end users.  The Company’s business is also affected by the availability and costs of certain raw materials that serve as significant components of its product offerings.  The Company’s risk factors are disclosed in Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

 

Results of Operations

 

Overview

 

Consolidated net sales for the three months ended April 1, 2017 decreased 1.1% to $68.7 million, compared with $69.4 million for the three months ended March 26, 2016.  Lower net sales in the first quarter of 2017 were the result of a decrease in sales of retail truck bodies, specialty vehicles and trolleys, partially offset by an increase in fleet truck sales.

 

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The sales order backlog at the end of the first quarter of 2017 totaled $114.9 million, up 15.5% compared with $99.5 million at the end of last year’s first quarter, excluding the trolley backlog of $2.5 million (the trolley product line was divested in 2016).  The Company’s order intake exceeded $100 million in the first quarter of 2017 and set a new first quarter record as both rental fleet and retail orders delivered year-over-year growth.

 

Gross profit for the three months ended April 1, 2017 decreased to $13.0 million, down from $15.2 million for the three months ended March 26, 2016.  As a percentage of net sales, the first quarter of 2017 gross margin decreased to 18.9% compared with 21.8% in the first quarter of 2016.  The gross margin was unfavorably impacted by temporary delays in receiving customer-supplied chassis, product mix that included a higher proportion of fleet truck sales which typically yield a lower gross margin, increased group health insurance claims and higher repairs and maintenance expenses associated with lean initiatives.

 

Selling, general and administrative expenses increased by $0.7 million, or 6.8%, to $10.1 million for the three months ended April 1, 2017, compared with $9.4 million for the three months ended March 26, 2016.  The increase was due to higher sales wages as the Company upgraded sales personnel in key regions, increased group health insurance claims, higher OEM marketing expenses and higher legal fees.

 

The Company recorded income tax expense of $0.9 million, at an effective tax rate of 32.7%, for the three months ended April 1, 2017, compared with $1.8 million, at an effective tax rate of 32.9%, for the three months ended March 26, 2016.

 

Net income for the three months ended April 1, 2017 was $1.9 million, or $0.11 per diluted share, compared with net income of $3.8 million, or $0.22 per diluted share, for the three months ended March 26, 2016.

 

On May 11, 2016, the Company entered into an Asset Purchase Agreement for the sale of certain assets of the Company’s trolley business. Trolley products represented less than 1% of the Company’s consolidated net sales for the first three months of 2017 and approximately 2% for the first three months of 2016.  The after-tax impact on consolidated operations for both periods was immaterial.  The first stage of the transaction closed on June 30, 2016 and the final stage of the transaction is scheduled to close in the second quarter of 2017.  The Company anticipates no material gain or loss will be recognized on the sale.  The sale of the trolley business does not meet the criteria of the Financial Accounting Standards Board (“FASB”) ASU 2014-8 (Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity) and will not be reported as discontinued operations.

 

Working capital increased to $59.6 million at April 1, 2017, compared with $58.2 million at December 31, 2016.  The Company ended the quarter with $5.4 million in cash and cash equivalents and $7.3 million in debt.  Stockholders’ equity increased at the quarter ended April 1, 2017 to $102.8 million compared with $101.7 million at December 31, 2016.  Supreme invested $0.5 million in facilities and equipment during the first three months of 2017, compared with $0.4 million in the first three months of 2016.  Net cash used by operating activities during the first three months of 2017 totaled $21.8 million, compared with $4.8 million in the first three months of 2016.

 

Through the first quarter of 2017, we are encouraged by our progress and we are optimistic about our strong backlog and the positive economic indicators.  The directive for 2017 remains to build upon our customer-centric strategy and drive continuous improvements in products, internal processes and customer service levels.  We will continue to invest in strategic initiatives that enhance the consistent execution of our strategy and accelerate profitable growth for the Company.

 

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Net sales

 

Net sales for the three months ended April 1, 2017 decreased $0.7 million, or 1.1%, to $68.7 million as compared with $69.4 million for the three months ended March 26, 2016.

 

Due to an increase in fleet truck body sales, truck body sales as a whole increased in the first quarter of 2017 by $0.6 million, or 0.9%, when compared with the same period in 2016.  The sales growth for the quarter was primarily the result of a higher proportion of fleet truck body sales which was offset in part by lower retail truck body sales.  Additionally, truck sales for the first quarter of 2017 were unfavorably impacted by temporary delays in receiving customer-supplied chassis to commence rental fleet production.  The Company’s order intake exceeded $100 million in the first quarter of 2017, setting a new first quarter record as both rental fleet and retail orders delivered year-over-year growth.  Specialty vehicle and trolley sales decreased in the first quarter of 2017 by $0.7 million, or 60.0%, and $0.4 million, or 46.6%, respectively, when compared with same period in 2016.  The reduction in trolley sales was the result of the sale of the product line, which is expected to close in the second quarter of 2017.  To address the Specialty vehicle sales decline, the Company continues to look for opportunities to expand its customer base and product offerings using existing capabilities with a lower cost structure.  The Company’s fiberglass facility supplies fiberglass reinforced plywood for use in the production of certain truck bodies and also sells product to third parties.  Sales to third parties decreased $0.3 million, or 18.5%, for the first quarter of 2017 when compared with last year’s first quarter.

 

Cost of sales and gross profit

 

Gross profit decreased by $2.2 million, or 14.3%, to $13.0 million for the three months ended April 1, 2017 as compared with $15.2 million for the three months ended March 26, 2016.  Gross margin, as a percentage of net sales declined to 18.9%, for the three months ended April 1, 2017 as compared with 21.8% for the three months ended March 26, 2016.

 

For the three months ended April 1, 2017, the gross margin was unfavorably impacted by temporary delays in receiving customer-supplied chassis to commence rental fleet production. While no orders were lost, the delays due to third-party transportation capacity constraints required the orders to be rescheduled across all plants into the subsequent quarters. Operating efficiencies were impacted as a result of dedicated personnel being onboarded and trained, and awaiting chassis arrivals. The chassis transportation issues were resolved in late March of 2017.  Additionally, the first quarter of 2017 included a product mix that contained a higher proportion of fleet truck sales which typically yield a lower gross margin.  Manufacturing overhead as a percentage of net sales increased during the first quarter of 2017 due to reconfiguring certain manufacturing facilities to improve operating efficiencies resulting in higher repairs and maintenance when compared with the first quarter of 2016.  The Company also incurred higher group health insurance claims in the first quarter of 2017 when compared with the first quarter of 2016 due to favorable claim experience in 2016 that did not repeat in 2017.

 

Delivery expense, as a percentage of net sales, for the three months ended April 1, 2017 decreased 0.1% as compared with the same period in 2016, due to changes in product mix and customer shipment requirements.

 

Selling, general and administrative expenses

 

Selling, general and administrative expenses increased by $0.7 million, or 6.8%, to $10.1 million for the three months ended April 1, 2017, as compared with $9.4 million for the three months ended March 26, 2016.  Selling expenses for the three months ended April 1, 2017 increased $0.4 million to $3.3 million as compared with $2.9 million for the three months ended March 26, 2016.

 

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The increase was due to higher sales wages as the Company upgraded sales personnel in key regions, annual merit increases, increased group health insurance claims and higher OEM marketing expenses.  As a percentage of net sales, selling expenses increased 0.5% for the three months ended April 1, 2017, as compared with the same period in 2016.

 

General and administrative expenses for the three months ended April 1, 2017 increased $0.3 million to $6.8 million as compared with $6.5 million for the three months ended March 26, 2016.  The increase was mainly the result of higher legal fees associated with the SVI, Inc. complaint and increased group health insurance claims.  The increased costs were partially offset by lower profit-based incentive compensation plans.  As a percentage of net sales, general and administrative expenses increased 0.5% for the three months ended April 1, 2017, as compared with the same period in 2016.

 

Other income

 

Other income was $69,000 for the three months ended April 1, 2017 compared with $36,000 for the three months ended March 26, 2016.  Other income consisted of rental income, gain on the sale of assets, and other miscellaneous income received by the Company.

 

Interest expense

 

Interest expense includes interest on bank debt, and chassis interest on bailment pool chassis reduced by interest support received from a chassis manufacturer.  Interest expense was $0.2 million for both of the three-month periods ended April 1, 2017 and March 26, 2016.  The effective interest rate on bank borrowings was 3.06% at April 1, 2017, and the Company was in compliance with all provisions of its Credit Agreement.

 

Income taxes

 

For the three months ended April 1, 2017, the Company recorded income tax expense of $0.9 million at an effective tax rate of 32.7% compared with $1.8 million at an effective tax rate of 32.9% for the three months ended March 26, 2016.  The rates differ from the federal statutory rate primarily because of varying state income tax rates and permanent federal income tax differences including benefits from a captive insurance company and the allowable domestic manufacturer deduction.

 

Net income

 

Net income for the three months ended April 1, 2017 was $1.9 million, or $0.11 per diluted share, compared with a net income of $3.8 million, or $0.22 per diluted share, for the three months ended March 26, 2016.

 

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Basic and diluted income per share

 

The following table presents basic and diluted income per share:

 

 

 

Three Months Ended

 

 

 

April 1,
2017

 

March 26,
2016

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

Basic

 

$

0.11

 

$

0.23

 

Diluted

 

0.11

 

0.22

 

 

 

 

 

 

 

Shares used in the computation of income per share:

 

 

 

 

 

Basic

 

17,099,107

 

16,682,812

 

Diluted

 

17,101,080

 

17,127,836

 

 

Liquidity and Capital Resources

 

Cash Flows

 

The Company’s primary sources of liquidity have been cash flows from operating activities and borrowings under its Credit Agreement. Principal uses of cash have been to support working capital needs, fund capital expenditures, pay cash dividends, and meet debt service requirements.

 

Operating activities

 

Cash flows from operations represent the net income earned in the reported periods adjusted for non-cash charges and changes in operating assets and liabilities. Net cash used in operating activities totaled $21.8 million for the three months ended April 1, 2017, as compared with net cash used in operating activities of $4.8 million for the three months ended March 26, 2016.

 

During the first three months of 2017, changes in operating assets and liabilities included a $17.7 million increase in inventories due to an increase in production to support our increasing sales order backlog for both retail and fleet truck customers. The increased sales volume compared with the fourth quarter of 2016 resulted in a $13.8 million increase in accounts receivable. These uses of cash were partially offset by a $7.1 million increase in trade accounts payable resulting from the higher level of inventories.

 

During the first three months of 2016, changes in operating assets and liabilities included an $8.5 million increase in inventories due to an increase in production to support our increasing sales order backlog for both retail and fleet truck customers. The increased sales volume also resulted in a $6.4 million increase in accounts receivable. These uses of cash were partially offset by a $5.4 million increase in trade accounts payable resulting from the higher level of inventories.

 

Investing activities

 

Net cash used in investing activities was $1.6 million for the three months ended April 1, 2017, as compared with net cash used in investing activities of $0.4 million for the three months ended March 26, 2016.

 

During the first three months of 2017, the Company’s capital expenditures were $0.5 million, primarily consisting of investments in replacement equipment. Additionally, the Company’s wholly-owned captive insurance subsidiary invested $1.1 million of insurance premiums during the first three months of 2017. During the first three months of 2016, the Company’s capital expenditures were $0.4 million, consisting of investments in property, plant and equipment.

 

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Financing activities

 

Net cash used in financing activities for the three months ended April 1, 2017 was $6.4 million, as compared with $5.9 million of net cash used in financing activities for the three months ended March 26, 2016.

 

During the first three months of 2017, the Company used $5.7 million to pay cash dividends to its shareholders. The payments consisted of a three and one-half cents ($0.035) per share regular quarterly dividend declared on March 9, 2017, and a thirty cents ($0.30) per share dividend declared on November 9, 2016. The dividend declared on November 9, 2016 consisted of a special dividend of twenty six and one-half cents ($0.265) per share, in addition to a regular quarterly dividend of three and one-half cents ($0.035) per share. Additionally, $0.5 million of shares were surrendered to the Company to satisfy tax obligations upon the vesting of restricted stock.

 

During the first three months of 2016, the Company used $5.6 million to pay cash dividends to its shareholders. The payments consisted of a three cents ($0.03) per share regular quarterly dividend declared on March 2, 2016, and a thirty cents ($0.30) per share dividend declared on November 10, 2015. The dividend declared on November 10, 2015 consisted of a special dividend of twenty seven cents ($0.27) per share, in addition to a regular quarterly dividend of three cents ($0.03) per share.

 

Capital Resources

 

Credit Agreement

 

On December 19, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). Under the terms of the Credit Agreement, Wells Fargo agreed to provide to the Company a credit facility of up to $45.0 million, consisting of a revolving credit facility, a term loan facility, and a letter of credit facility.  The Company had unused credit capacity of $35.0 million at April 1, 2017. The Company was in compliance with all provisions of the Credit Agreement during the three months ended April 1, 2017.  The Credit Agreement is for a period of five years ending on December 19, 2017.  The Company expects to enter into a new credit agreement before the Credit Agreement expires.

 

Summary of Liquidity and Capital Resources

 

The Company’s primary capital needs are for working capital demands, to meet its debt service obligations, and to finance capital expenditure requirements. Cash generated from operations, and borrowings available under the Credit Agreement, are expected to be sufficient to finance the known and/or foreseeable liquidity and capital needs of the Company for at least the next 12 months based on our current cash flow budgets and forecasts of our liquidity needs.

 

Critical Accounting Policies and Estimates

 

Management’s discussion and analysis of its financial position and results of operations are based upon the Company’s condensed consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities.  The Company’s significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2016. In management’s opinion, the Company’s critical accounting policies include revenue recognition, inventory reserves, fair value of assets held for sale, accrued insurance, accrued warranty and unrecognized tax positions.

 

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Revenue Recognition — The Company generally recognizes revenue when products are shipped to the customer.  Revenue on certain customer requested bill and hold transactions is recognized after the customer is notified that the products have been completed according to customer specifications, have passed all of the Company’s quality control inspections, and are ready for delivery based on established delivery terms.

 

Inventory Reserves — The Company makes estimates regarding the future use of raw materials and finished products and provides for obsolete or slow-moving inventories. Periodically, management reviews inventories and adjusts the excess and obsolete reserves based on product life cycles, product demand, and/or market conditions.  In addition, the Company reserves for possible losses due to production reporting errors based upon monthly production.  We conduct semi-annual physical inventories at a majority of our locations and schedule them in a manner that provides coverage in each of our calendar quarters.

 

Fair Value of Assets Held for Sale — The Company evaluates the carrying value of property held for sale whenever events or changes in circumstances indicate that a property’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, or (2) a significant adverse change in the extent or manner in which an asset is used. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The Company estimates the fair value of its properties held for sale based on appraisals and other current market data.

 

Accrued Insurance — The Company has a self-insured retention against product liability claims with insurance coverage over and above the retention.  The Company is also self-insured for a portion of its employee medical benefits and workers’ compensation.  Product liability claims are routinely reviewed by the Company’s insurance carrier, and management routinely reviews other self-insurance risks for purposes of establishing ultimate loss estimates.  In addition, management must determine estimated liability for claims incurred but not reported.  Such estimates, and any subsequent changes in estimates, may result in adjustments to our operating results in the future.

 

Accrued Warranty — The Company provides limited warranties for periods of up to five years from the date of retail sale.  Estimated warranty costs are accrued at the time of sale and are based upon historical experience.

 

Unrecognized Tax Positions — The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions.  ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.  We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

 

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Forward-Looking Statements

 

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, other than historical facts, which reflect the view of management with respect to future events. When used in this report, words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “may,” “plan,” “will,” “could,” 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, management. 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, and it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, an economic slowdown in the specialized vehicle industry, restrictions on financing imposed by the Company’s lender(s), limitations on the availability of chassis on which the Company’s products are dependent, availability of raw materials, raw material cost increases, interest rate increases, a change in the number of vehicles subject to a recalls, changes in the costs of implementing the recalls, actions by NHTSA, including fines and/or penalties, or limitations on the availability of materials used to implement the recalls. Additionally, end of first quarter 2017 backlog may not be indicative of end of second quarter 2017 backlog, end of full-year 2017 backlog or future performance. Furthermore, the Company can provide no assurance that any 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 view of 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.

 

ITEM 3.                                                QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

There has been no material change from the information provided in the Company’s Annual Report on Form 10-K, “Item 7A: Quantitative and Qualitative Disclosures About Market Risk,” for the year ended December 31, 2016.

 

ITEM 4.                CONTROLS AND PROCEDURES.

 

a.                                      Evaluation of Disclosure Controls and Procedures.

 

In connection with the preparation of this Form 10-Q, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended).  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of April 1, 2017.

 

b.                                      Changes in Internal Control over Financial Reporting.

 

There has been no change in the Company’s internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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PART II.               OTHER INFORMATION

 

ITEM 1.                LEGAL PROCEEDINGS.

 

Not applicable.

 

ITEM 1A.             RISK FACTORS.

 

For a discussion of those “Risk Factors” affecting the Company, you should carefully consider the “Risk Factors” discussed in Part I, under “Item 1A: Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2016, which is herein incorporated by reference.

 

ITEM 2.                UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

Issuer Purchases of Equity Securities

 

Period

 

(a) Total number of
shares (or units)
purchased (1)

 

(b) Average price
paid per share (or
unit)

 

(c) Total number
of shares (or units)
purchased as a part
of publicly
announced plans or
programs

 

(d) Maximum
number (or
approximate dollar
value) of shares (or
units) that may yet
be purchased under
the plans or
programs

 

 

 

 

 

 

 

 

 

 

 

January 1, 2017 to January 28, 2017

 

 

$

 

N/A

 

N/A

 

January 29, 2017 to February 25, 2017

 

 

$

 

N/A

 

N/A

 

February 26, 2017 to April 1, 2017

 

26,329

 

$

19.85

 

N/A

 

N/A

 

Total

 

26,329

 

 

 

 

 

 

 

 


(1) Shares surrendered to satisfy tax obligations upon the vesting of restricted stock.

 

ITEM 3.                                                DEFAULTS UPON SENIOR SECURITIES.

 

Not applicable.

 

ITEM 4.                                                MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5.                                                OTHER INFORMATION.

 

Not applicable.

 

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ITEM 6.                EXHIBITS.

 

Exhibit 3.1

 

Certificate of Incorporation of the Company, filed as Exhibit 3(a) to the Company’s Registration Statement on Form 8-A, filed with the Commission on September 18, 1989, and incorporated herein by reference.

 

 

 

Exhibit 3.2

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 10, 1993 filed as Exhibit 3.2 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by reference.

 

 

 

Exhibit 3.3

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on May 29, 1996 filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1996, and incorporated herein by reference.

 

 

 

Exhibit 3.4

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 16, 2014 and filed as Exhibit 3.4 of the Company’s quarterly report on Form 10-Q for the period ended June 28, 2014, and incorporated herein by reference.

 

 

 

Exhibit 3.5

 

Third Amended and Restated Bylaws, filed as Exhibit 3.1 to the Company’s current report on Form 8-K, filed on November 10, 2014, and incorporated herein by reference.

 

 

 

Exhibit 10.1*

 

2017 Supreme Cash Bonus Plan.

 

 

 

Exhibit 31.1*

 

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 31.2*

 

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 32.1*

 

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 32.2*

 

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 101*

 

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2017, filed on May 5, 2017, formatted in XBRL: (i) Condensed Consolidated Balance Sheets (Unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (Unaudited), (iii) Condensed Consolidated Statements of Cash Flows (Unaudited) and (iv) the Notes to Condensed Consolidated Financial Statements (Unaudited).

 


*Filed herewith.

 

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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.

 

 

 

 

 

 

 

By:

/s/ Mark D. Weber

DATE: May 5, 2017

 

Mark D. Weber

 

 

President and Chief Executive Officer

 

 

 

 

 

By:

/s/ Matthew W. Long

DATE: May 5, 2017

 

Matthew W. Long

 

 

Chief Financial Officer

 

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INDEX TO EXHIBITS

 

Exhibit
Number

 

Description of Document

 

 

 

Exhibit 3.1

 

Certificate of Incorporation of the Company, filed as Exhibit 3(a) to the Company’s Registration Statement on Form 8-A, filed with the Commission on September 18, 1989, and incorporated herein by reference.

 

 

 

Exhibit 3.2

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 10, 1993 filed as Exhibit 3.2 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by reference.

 

 

 

Exhibit 3.3

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on May 29, 1996 filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1996, and incorporated herein by reference.

 

 

 

Exhibit 3.4

 

Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 16, 2014 and filed as Exhibit 3.4 of the Company’s quarterly report on Form 10-Q for the period ended June 28, 2014, and incorporated herein by reference.

 

 

 

Exhibit 3.5

 

Third Amended and Restated Bylaws, filed as Exhibit 3.1 to the Company’s current report on Form 8-K, filed on November 10, 2014, and incorporated herein by reference.

 

 

 

Exhibit 10.1*

 

2017 Supreme Cash Bonus Plan.

 

 

 

Exhibit 31.1*

 

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 31.2*

 

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 32.1*

 

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 32.2*

 

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

Exhibit 101*

 

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2017, filed on May 5, 2017, formatted in XBRL: (i) Condensed Consolidated Balance Sheets (Unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (Unaudited), (iii) Condensed Consolidated Statements of Cash Flows (Unaudited) and (iv) the Notes to Condensed Consolidated Financial Statements (Unaudited).

 


*Filed herewith.

 

22


EX-10.1 2 a17-8904_1ex10d1.htm EX-10.1

Exhibit 10.1

 

2017 SUPREME CASH BONUS PLAN

 

SECTION 1.  DEFINITIONS: Terms capitalized in this 2017 Supreme Cash Bonus Plan (the “2017 Bonus Plan”), but not otherwise defined herein, shall have the meanings ascribed to such terms in the Supreme Industries, Inc. 2016 Long-Term Incentive Plan.

 

Award:  Shall mean after the Plan Year and all Performance Goal achievement is determined, the payment of cash pursuant to the terms of this 2017 Bonus Plan.

 

Target Incentive: Shall mean a target dollar amount that a Participant will earn, payable in the form of cash, if all applicable Performance Goals for the Plan Year are achieved at the 100% level.  The target is set for each Participant in accord with their function within the Company.

 

Leadership Team: Shall mean the persons serving in the following positions:

 

President and Chief Executive Officer

 

Chief Financial Officer

 

Vice President, Operations

 

Vice President and General Counsel

 

Vice President, Human Resources

 

Vice President, Marketing

 

Vice President, Sales

 

Vice President, Engineering

 

Participant:  Shall mean the Leadership Team and any other employee of the Company designated as covered by this 2017 Bonus Plan by the CEO with the advice and consent of Supreme Industries, Inc.’s Management Committee.

 

Plan Year: Shall mean the Company’s 2017 fiscal year (beginning January 1, 2017 and ending December 30, 2017).

 

Performance Goals: Shall mean goals based on specific and objectively measurable financial metrics selected by the Compensation Committee and/or the Board of Directors, as applicable.

 

Supreme or Company:  Shall mean Supreme Industries, Inc. or any subsidiary of Supreme Industries, Inc.

 

SECTION 2.  SUMMARY:  The 2017 Bonus Plan is intended to provide financial incentives to executive officers and key employees of Supreme Industries, Inc. and its subsidiaries through the use of “at risk” variable pay tied to specific performance incentives which will motivate their actions and behaviors in ways beneficial to the Company and its stockholders.  This 2017 Bonus Plan will offer Participants the opportunity to earn a cash bonus for the attainment of 2017 Bonus Plan incentives.

 

1



 

SECTION 3.  PHILOSOPHY: The Board believes that compensation of executive officers and key employees should be partially “at risk” and variable, based on performance against certain pre-established financial objectives that are important to the Company.  The 2017 Bonus Plan is intended to focus the efforts of the Participants on achieving those objectives in order to help ensure the sustained profitability, long-term growth, and continued wellbeing of the Company.  The Board believes that doing so aligns the interests of management with stockholders.

 

The 2017 Bonus Plan is structured to provide Participants with competitive cash rewards for successful performance, which enables the Company to attract and retain critical management resources.

 

SECTION 4.  ADMINISTRATION:  Administration of this 2017 Bonus Plan shall be vested in the Compensation Committee.  The decisions of the Compensation Committee shall be final as to the interpretation of the 2017 Bonus Plan or any rule, procedure or action related thereto.  All Participants consent to the transfer and use of personal data by the Company and its agents in connection with the administration of this 2017 Bonus Plan.

 

SECTION 5.  ELIGIBILITY: Only Participants as defined above are eligible to participate in the 2017 Bonus Plan.

 

To receive an Award under the 2017 Bonus Plan, a Participant must be an active, full-time employee on the last business day of the Plan Year, except as provided herein.  An employee who is hired or promoted after the date of adoption of this 2017 Bonus Plan may be selected as a Participant at such time, provided that any Award earned by such Participant shall be prorated to reflect that Participant’s actual time in service, except as otherwise provided by the Board pursuant to an employment agreement or similar document.

 

If a Participant dies or incurs a Total and Permanent Disability, an Award, prorated on the basis of Participant’s actual time in service with the Company during the Plan Year prior to death or Total and Permanent Disability, will be paid to the Participant or his or her beneficiary at the same time and in the same manner as Awards for the Plan Year are paid to the other Participants.  The Participant’s beneficiary under the 2017 Bonus Plan shall be the beneficiary designated for the Participant’s group life insurance plan.  If no such beneficiary has been designated, the Award will be paid to the Participant’s estate.

 

If a Participant terminates service due to Retirement prior to the last day of the Plan Year, an Award, prorated on the basis of Participant’s actual time in service with the Company during the Plan Year prior to Retirement, shall be paid to the Participant at the same time and in the same manner as Awards for the Plan Year are paid to other Participants.

 

If a Change In Control occurs prior to the last day of the Plan Year, the full value of the Award, payable based on the Target Incentive, shall be paid to the Participant on or within 60 days of the Change In Control.

 

SECTION 6.  SETTING OF TARGET INCENTIVES, PERFORMANCE GOALS, AND CALCULATION OF AWARDS FOR THE LEADERSHIP TEAM:  Management has submitted recommendations for the 2017 Bonus Plan. The Compensation Committee has reviewed the proposal to determine whether management’s recommendations generally align with the Company’s most recent compensation study, the Company’s 2017 budget, and any other relevant factors.  The Compensation Committee determined that the procedures and goals outlined in this section were proper and suitable to meet the Company’s goals.

 

The determination of the Target Incentive will be made by the Compensation Committee of the Board for each member of the Leadership Team, with the exception of the CEO, whose Target Incentive will be set by the independent members of the Board of Directors.  Each member of the Leadership Team will have their Target Incentive provided to them in writing separate from this 2017 Bonus Plan.

 

2



 

Performance Goals for the Leadership Team in 2017 are as follows:

 

·                  Year over year net sales growth to budget;

 

·                  EBITDA to budget; and

 

·                  Average controllable working capital as a percentage of sales to budget.(1)

 

The first two goals each shall be weighted as 40% of the total.  The remaining goal (working capital) shall be weighted 20% of the total.  Performance Goal achievement will be determined by comparing the relevant Performance Goal with the Company’s actual performance for that financial metric during the Plan Year.  The threshold for each Performance Goal is at least 80% of the goal set for 2017.  For each one percent increment (rounded to the nearest whole percentage) below the goal, achievement for a Performance Goal will decline by two percent (2%) until reaching the threshold, below which there will be no Award achievement attributable to that particular Performance Goal.  Participants may earn above target incentive Awards for above goal performance, up to a maximum Award of 125% of the target incentive.  The maximum performance cap is 125% for each Performance Goal.  For each one percent increment (rounded to the nearest whole percentage) of above goal performance, achievement for that Performance Goal will increase by two percent (2%), up to the 125% cap.

 

Except with respect to the CEO, whose Performance Goal achievement will be determined by the independent members of the Board, Performance Goal achievement for the Plan Year will be determined by the Compensation Committee, in its sole discretion. Once the Compensation Committee determines the level of achievement for each Performance Goal, the Compensation Committee will apply the weighting and the resulting factor will be multiplied by each member of the Leadership Team’s Target Incentive to arrive at the Participant’s Award.

 

The Compensation Committee may, in its discretion, adjust the payout of an Award downward after consideration of other business factors, including overall performance of the Company and the individual’s contribution to Company performance. The Compensation Committee may reduce or entirely eliminate an Award in the event a Participant is on a performance improvement plan or otherwise demonstrates unsatisfactory performance or discipline during the Plan Year.  The Compensation Committee may adjust a payout of an Award in its discretion to prevent the enlargement or dilution of the Award because of extraordinary events or circumstances as determined by the Compensation Committee.

 

SECTION 7.  TARGET INCENTIVES, PERFORMANCE GOALS AND CALCULATION OF AWARDS FOR OTHER PARTICIPANTS:

 

Once the Leadership Team target incentives and goals are set, the CEO will then set target incentives and goals for all other Participants, utilizing the Performance Goals specified above or other similar goals closely relating each individual’s job functions, with weighting to be determined by the CEO.  Prior to advising the Participants of their participation in this 2017 Bonus Plan, the CEO will advise the Compensation Committee of his determinations.

 

SECTION 8.  APPROVAL AND PAYMENT OF AWARDS:

 

Upon completion of the Plan Year, the Compensation Committee shall certify to what extent the Performance Goals were met and determine the Award payable to each Participant based on information supplied and certified by management.  Certification by the Compensation Committee shall be subject to completion of the annual audit and certification of overall Company results by the Company’s independent auditors and the CEO’s Award shall be subject to ratification by the independent members of the Board of Directors. 

 


(1)  Twelve month average of the sum of accounts receivable, plus inventory, minus accounts payables (excludes prepaid expenses and accrued liabilities) divided by net sales for the year.

 

3



 

Payment of Awards shall be made in a lump sum payment in cash except to the extent of Participant’s elective contribution to any qualified deferred compensation plan. To the extent Awards are subject to Section 409A of the Code, payments are intended to qualify as short-term deferrals under the regulations adopted under Section 409A of the Code.  Payment of Awards shall be made as soon as reasonably practicable in 2018, but no later than March 15, 2018.   The Company may deduct from any Award such amounts as may be required to be withheld under any federal, state or local tax laws.

 

SECTION 9.   RECOUPMENT OF AWARDS:

 

If the Board learns of any intentional misconduct by a Participant which directly contributes to the Company having to restate all or a portion of its financial statements, the Board may, in its sole discretion, require the Participant to reimburse the Company for the difference between any Awards paid to the Participant based on achievement of financial results that were subsequently the subject of a restatement and the amount the Participant would have earned as awards under the 2017 Bonus Plan based on the financial results as restated.

 

SECTION 10.  NO CONTRACT:

 

The 2017 Bonus Plan is not and shall not be construed as an employment contract or as a promise or contract to pay Awards to Participants or their beneficiaries.  The 2017 Bonus Plan shall be approved by the Compensation Committee and may be amended from time to time by the Compensation Committee or terminated without notice.  No Participant or beneficiary may sell, assign, transfer, discount or pledge as collateral for a loan, or otherwise anticipate any right to payment of an Award under this 2017 Bonus Plan.

 

SECTION 11.  GOVERNING LAW

 

This 2017 Bonus Plan shall be governed by the laws of the State of Delaware.

 

4


EX-31.1 3 a17-8904_1ex31d1.htm EX-31.1

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Mark D. Weber, certify that:

 

1.                                      I have reviewed this Quarterly Report on Form 10-Q of Supreme Industries, Inc.;

 

2.                                      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                                      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.                                      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)                                     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)                                     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)                                      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)                                     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.                                      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)                                     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)                                     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

DATE: May 5, 2017

/s/ Mark D. Weber

 

Mark D. Weber

 

Chief Executive Officer

 


EX-31.2 4 a17-8904_1ex31d2.htm EX-31.2

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, Matthew W. Long, certify that:

 

1.                                      I have reviewed this Quarterly Report on Form 10-Q of Supreme Industries, Inc.;

 

2.                                      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.                                      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.                                      The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)                                     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)                                     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)                                      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)                                     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.                                      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)                                     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)                                     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

DATE: May 5, 2017

/s/ Matthew W. Long

 

Matthew W. Long

 

Chief Financial Officer

 


EX-32.1 5 a17-8904_1ex32d1.htm EX-32.1

Exhibit 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Supreme Industries, Inc. (the “Company”) does hereby certify, to such officer’s knowledge, that:

 

The Quarterly Report on Form 10-Q for the quarter ended April 1, 2017 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

 

DATE: May 5, 2017

/s/ Mark D. Weber

 

Mark D. Weber

 

Chief Executive Officer

 

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 


EX-32.2 6 a17-8904_1ex32d2.htm EX-32.2

Exhibit 32.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Supreme Industries, Inc. (the “Company”) does hereby certify, to such officer’s knowledge, that:

 

The Quarterly Report on Form 10-Q for the quarter ended April 1, 2017 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

 

DATE: May 5, 2017

/s/ Matthew W. Long

 

Matthew W. Long

 

Chief Financial Officer

 

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 


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COMMITMENTS AND CONTINGENCIES</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The Company is subject to various investigations, claims, and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, certain of which are covered in whole or in part by insurance.&nbsp; The Company establishes accruals for these matters to the extent that losses are deemed probable and are reasonably estimable.&nbsp; Although the outcome of these matters cannot be fully determined on the basis of information currently available, it is the opinion of management that the ultimate outcome of these matters would not be significant to the Company&#x2019;s consolidated financial position, results of operations, or cash flow.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On January&nbsp;3, 2017, an amended complaint was filed against the Company&#x2019;s subsidiary, Supreme Corporation, in a suit (SVI,&nbsp;Inc. v. Supreme Corporation, Hometown Trolley (a/k/a Double K,&nbsp;Inc.) and Dustin Pence) in the United States District Court, District of Nevada.&nbsp; The amended complaint (original complaint filed on May&nbsp;16, 2016), filed by Supreme Corporation&#x2019;s former trolley distributor, alleges that Supreme Corporation&#x2019;s sale of its trolley assets to another trolley manufacturer was improper.&nbsp; Claims alleged against Supreme Corporation include: (i)&nbsp;misappropriation of trade secrets; (ii)&nbsp;civil conspiracy/collusion; (iii)&nbsp;tortious interference with contractual relationships; (iv)&nbsp;tortious interference with prospective economic advantage; (v)&nbsp;unjust enrichment; (vi)&nbsp;breach of contract; (vii)&nbsp;breach of the covenant of good faith and fair dealing; (viii)&nbsp;breach of fiduciary duties; (ix)&nbsp;promissory estoppel; (x)&nbsp;declaratory relief establishing a joint venture or partnership; and (xi)&nbsp;cancellation of a trademark registration.&nbsp;&nbsp;The plaintiff alleges that the net present value of the amount lost by the plaintiff is approximately $40,000,000.&nbsp;&nbsp;Supreme Corporation has filed a motion to dismiss which is pending.&nbsp;&nbsp;Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On November&nbsp;4, 2016, a putative class action lawsuit was filed against the Company, Mark Weber (the Company&#x2019;s Chief Executive Officer) and Matthew W. Long (the Company&#x2019;s Chief Financial Officer) in the United States District Court for the Central District of California alleging the defendants violated Sections 10(b)&nbsp;and 20(a)&nbsp;of the Securities Exchange Act of 1934 and Rule&nbsp;10b-5 by making material, misleading statements in July&nbsp;2016 regarding projected backlog.&nbsp;&nbsp;The plaintiff seeks to recover unspecified damages.&nbsp;&nbsp;On February&nbsp;14, 2017, the court transferred the venue of the case to the Northern District of Indiana upon the joint stipulation of the plaintiff and the defendants.&nbsp;&nbsp;An amended complaint was filed on April&nbsp;24, 2017 challenging statements made during a putative class period of October&nbsp;22, 2015 through October&nbsp;21, 2016.&nbsp;&nbsp;Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 0.035 0.300 3791443 1884253 0.02 0.01 54289246 55678922 0.0050 0.0150 0.0250 0.0050 0.0150 LIBOR prime rate federal funds rate LIBOR prime rate LIBOR prime rate 166667 P5Y -300350 172623 2181778 2354401 872358 838351 0.031 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 5 &#x2014; STOCK-BASED COMPENSATION</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The following table summarizes the activity for the outstanding stock options for the three months ended April&nbsp;1, 2017:</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Weighted&nbsp;-&nbsp;Average</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Options</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Exercise&nbsp;Price</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Outstanding, December&nbsp;31, 2016</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>17,850 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>2.12 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 20pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Exercised</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>(17,850 </td> <td valign="bottom" style="width:02.50%;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">)</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.86%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>2.12 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.86%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Outstanding, April&nbsp;1, 2017</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:16.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The following table summarizes the activity for the unvested restricted stock for the three months ended April&nbsp;1, 2017:</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Unvested</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Weighted&nbsp;-&nbsp;Average</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Restricted</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Grant&nbsp;Date</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Stock</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Fair&nbsp;Value</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Unvested, December&nbsp;31, 2016</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>129,666 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>8.12 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Granted</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>77,495 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>19.54 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Vested</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>(24,130 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">)</font></p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>9.06 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Forfeited</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.88%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Unvested, April&nbsp;1, 2017</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>183,031 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.86%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>12.83 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.86%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The total fair value of restricted shares vested and recognized as stock-based compensation expense during the three months ended April&nbsp;1, 2017 was $218,607.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">As a part of annual director compensation, a stock award is paid to each of the Company&#x2019;s outside directors equal to $40,000 divided by the closing sales price on the grant date. The grants are made in quarterly increments. The director stock-based compensation expense recognized during the three months ended April&nbsp;1, 2017 was $70,000.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Total unrecognized compensation expense related to all share-based awards outstanding at April&nbsp;1, 2017, was approximately $2.3 million and is to be recorded over a weighted-average contractual life of 2.4 years.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On May&nbsp;25, 2016, the Company held its annual meeting of stockholders at which the Company&#x2019;s stockholders approved the 2016 Long-Term Incentive Plan (the &#x201C;Plan&#x201D;) which had previously been approved by the Board of Directors and recommended to the stockholders. The Plan is effective until May&nbsp;25, 2026; provided, however, any awards issued prior to the Plan&#x2019;s termination will remain outstanding in accordance with their terms. The Plan authorizes the issuance of 1,000,000 shares of the Company&#x2019;s Class&nbsp;A Common Stock with certain officers being limited to receiving grants of 100,000 shares in any one year. Employees, contractors and non-employee directors of the Company and its subsidiaries are eligible to receive awards under the Plan. The following types of awards may be granted under the Plan:&nbsp; (1)&nbsp;stock options (incentive and non-qualified); (2)&nbsp;stock appreciation rights; (3)&nbsp;restricted stock and restricted stock units; (4)&nbsp;dividend equivalent rights; (5)&nbsp;performance awards based on achieving specified performance goals; and (6)&nbsp;other awards. As of April&nbsp;1, 2017, shares reserved for the granting of future share-based awards totaled 913,731, compared to 1,012,140 shares at December&nbsp;31, 2016.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 8 &#x2014; SALE OF TROLLEY BUSINESS</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On May&nbsp;11, 2016, the Company entered into an Asset Purchase Agreement for the sale of certain assets of the Company&#x2019;s trolley business. Trolley products represented less than 1% of the Company&#x2019;s consolidated net sales for the first three months of 2017 and approximately 2% for the first three months of 2016.&nbsp;&nbsp;The after-tax impact on consolidated operations for both periods was immaterial.&nbsp;&nbsp;The first stage of the transaction closed on June&nbsp;30, 2016 and the final stage of the transaction is scheduled to close in the second quarter of 2017.&nbsp;&nbsp;The Company anticipates no material gain or loss will be recognized on the sale.&nbsp;&nbsp;The sale of the trolley business does not meet the criteria of the Financial Accounting Standards Board (&#x201C;FASB&#x201D;) ASU 2014-8 (Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity) and will not be reported as discontinued operations.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 40000 0.23 0.11 0.22 0.11 0.329 0.327 2300000 P2Y4M24D <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 3 &#x2014; FAIR VALUE MEASUREMENT</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Generally accepted accounting principles (&#x201C;GAAP&#x201D;) define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.&nbsp;&nbsp;GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.&nbsp;&nbsp;The standard describes three levels of inputs that may be used to measure fair value:</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt 0pt 0pt 36pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt 0pt 0pt 36pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Level 2: Significant other observable inputs (other than Level 1 prices such as quoted prices for similar assets or liabilities); quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt 0pt 0pt 36pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Level 3: Significant unobservable inputs that reflect a company&#x2019;s own assumptions about the assumptions that market participants would use in pricing an asset or liability.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The Company used the following methods and significant assumptions to estimate the fair value of items:</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt 0pt 0pt 36pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Investments:&nbsp;&nbsp;The fair values of investments available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt 0pt 0pt 36pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Derivatives:&nbsp;&nbsp;Our derivative instruments consist of an interest rate swap, currently reflected as other accrued liabilities on the Condensed Consolidated Balance Sheets. The Company obtains fair values from financial institutions that utilize internal models with observable market data inputs to estimate the fair value of these instruments (Level 2 inputs).</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The carrying amounts of cash and cash equivalents, accounts receivable, and trade accounts payable approximated fair value as of April&nbsp;1, 2017 and December&nbsp;31, 2016, because of the relatively short maturities of these financial instruments. The carrying amount of current maturities of long-term debt approximated fair value as of April&nbsp;1, 2017 and December&nbsp;31, 2016, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 300 7738 15160657 12995777 5599353 2768382 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 6 &#x2014; INCOME TAXES</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">For the three months ended April&nbsp;1, 2017, the Company recorded income tax expense of $0.9 million at an effective tax rate of 32.7% compared with $1.8 million at an effective tax rate of 32.9% for the three months ended March&nbsp;26, 2016.&nbsp;&nbsp;The rates differ from the federal statutory rate primarily because of varying state income tax rates and permanent federal income tax differences including benefits from a captive insurance company and the allowable domestic manufacturer deduction.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 1840000 905397 9382120 25002928 -182829 -245403 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 2 &#x2014; INVENTORIES</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Inventories, which are stated at the lower of cost or market with cost determined using the first-in, first-out method, consist of the following, net of applicable reserves of $1.2 million and $1.1 million as of April 1, 2017 and December 31, 2016, respectively:</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">April&nbsp;1,</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">December&nbsp;31,</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">2017</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">2016</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Raw materials</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>29,862,338 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>17,404,606 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Work-in-progress</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>5,288,096 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>3,397,225 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Finished goods</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>6,821,336 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>3,443,491 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>41,971,770 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.86%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>24,245,322 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:10.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:10.86%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 3443491 6821336 24245322 41971770 17404606 29862338 1100000 1200000 3397225 5288096 1900000 1900000 32237935 33499482 133969284 136318575 30056157 31145081 0 0 0.0050 0.0020 0.0305 0.0306 45000000 35000000 10000000 35000000 7500000 7300000 7195105 7104666 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 4 &#x2014; DEBT</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">Credit Agreement</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On December&nbsp;19, 2012, the Company entered into an Amended and Restated Credit Agreement (the &#x201C;Credit Agreement&#x201D;) with Wells Fargo Bank, National Association (&#x201C;Wells Fargo&#x201D;). Under the terms of the Credit Agreement, Wells Fargo agreed to provide to the Company a credit facility of up to $45.0 million, consisting of a revolving credit facility, a term loan facility, and a letter of credit facility.&nbsp;&nbsp;The Company had unused credit capacity of $35.0 million at April&nbsp;1, 2017. Interest on outstanding borrowings under the Credit Agreement is based on Wells Fargo&#x2019;s prime rate or LIBOR depending on the pricing option selected and the Company&#x2019;s leverage ratio (as defined in the Credit Agreement) resulting in an effective interest rate of 3.06% at April&nbsp;1, 2017 and 3.05% at December&nbsp;31, 2016.&nbsp;&nbsp;Pursuant to the Credit Agreement, the financial covenants include a consolidated total leverage ratio, a consolidated fixed charge coverage ratio, a limitation on annual capital expenditures, and a limitation on quarterly cash dividends. As of April&nbsp;1, 2017 and December&nbsp;31, 2016, the Company was in compliance with all financial covenants. The Credit Agreement is for a period of five years ending on December&nbsp;19, 2017.&nbsp;&nbsp;The Company expects to enter into a new credit agreement before the Credit Agreement expires.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;font-style:italic;">Revolving Credit Facility</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The revolving credit facility provides for borrowings of up to $35.0 million. The revolving credit facility bears interest at (i)&nbsp;LIBOR plus a margin which varies from 1.50% to 2.50% based upon a leverage ratio of total indebtedness to trailing four quarter EBITDA or (ii)&nbsp;the higher of (a)&nbsp;the prime rate and (b)&nbsp;the federal funds rate plus 0.50% plus a margin which varies from 0.50% to 1.50% based upon the debt to EBITDA leverage ratio. The revolving credit facility also requires a quarterly commitment fee ranging from 0.20% to 0.50% per annum depending on the Company&#x2019;s financial ratios and based upon the average daily unused portion.&nbsp;&nbsp;As of April&nbsp;1, 2017, and December&nbsp;31, 2016, there were no borrowings against the revolving credit facility.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;font-style:italic;">Term Loan Facility</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The term loan facility provides for borrowings of up to $10.0 million. The term loan is secured by real estate and improvements, payable in quarterly installments of $166,667 commencing on June&nbsp;28, 2013, plus interest at prime rate or LIBOR, with the remaining balance due upon maturity on December&nbsp;19, 2017. As of April&nbsp;1, 2017 and December&nbsp;31, 2016, the outstanding balance under the term loan facility was $7.3 million and $7.5 million, respectively.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">On August&nbsp;9, 2013, the Company entered into an interest rate swap agreement for a portion of the term loan with a notional amount of $5.0 million. The interest rate swap agreement provides for a 3.1% fixed interest rate and matures on December&nbsp;19, 2017. The Company designated this swap agreement as a cash flow hedge on its variable rate debt and records the fair value of the swap agreement as an asset or liability on the balance sheet, with changes in fair value recognized in other comprehensive income (loss).</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;font-style:italic;">Letter of Credit Facility</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Outstanding letters of credit, related to the Company&#x2019;s workers&#x2019; compensation insurance policies, reduce available borrowings under the Credit Agreement. During 2014, the Company replaced all outstanding letters of credit with cash deposits with its insurance carriers. As of April&nbsp;1, 2017 and December&nbsp;31, 2016, cash deposits with insurance carriers totaled $1.9 million.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 40000000 -5888895 -6375915 -422584 -1619133 -4823673 -21848100 3759353 1862985 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 10 &#x2014; RECENTLY ISSUED ACCOUNTING PRONOUCEMENTS</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">In May&nbsp;2014, the FASB issued ASU 2014-09, </font><font style="display:inline;font-style:italic;">Revenue from Contracts with Customers</font><font style="display:inline;">. This ASU provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 (as updated by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20) is for annual periods, and interim periods within those years, beginning after December&nbsp;15, 2017, with early adoption permitted for years beginning after December&nbsp;15, 2016, to be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effects of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company&#x2019;s results of operations, cash flows or financial position, however, this new accounting guidance may require enhanced footnote disclosures.&nbsp; The Company will adopt the accounting standard during the first quarter of 2018 as required, but has not yet decided on a transition method.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">In February&nbsp;2016, the FASB issued ASU 2016-02, </font><font style="display:inline;font-style:italic;">Leases</font><font style="display:inline;">.&nbsp;&nbsp;The ASU provides guidance that will require an entity to recognize lease assets and lease liabilities on its balance sheet for leases in excess of one year that were previously classified as operating leases under U.S. GAAP. The guidance also requires companies to disclose in the footnotes to the financial statements information about the amount, timing, and uncertainty of the payments made for the lease agreements. The guidance is effective for financial statements issued for annual and interim periods beginning after December&nbsp;15, 2018 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company&#x2019;s results of operations, cash flows or financial position.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 5782182 3013785 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 1 &#x2014; BASIS OF PRESENTATION AND OPINION OF MANAGEMENT</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form&nbsp;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 accounting principles generally accepted in the United States of America.&nbsp;&nbsp;In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair presentation of the interim periods reported.&nbsp;&nbsp;The December&nbsp;31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.&nbsp;&nbsp;References to &#x201C;we,&#x201D; &#x201C;us,&#x201D; &#x201C;our,&#x201D; &#x201C;its,&#x201D; &#x201C;Supreme,&#x201D; or the &#x201C;Company&#x201D; refer to Supreme Industries,&nbsp;Inc. and its subsidiaries.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The Company has adopted a 52- or 53-week fiscal year ending the last Saturday in December.&nbsp;&nbsp;The results of operations for the three months ended April&nbsp;1, 2017 and March&nbsp;26, 2016 are for 13-week periods.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 5644154 5463816 32090 21268 36476 69480 161769 522687 5572859 5724469 399324 539046 23560 1088737 300 8650 12400 37910 45747933 45523946 166667 166669 69449903 68674699 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;"><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font></font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">April&nbsp;1,</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">December&nbsp;31,</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">2017</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">2016</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Raw materials</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>29,862,338 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>17,404,606 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Work-in-progress</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>5,288,096 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>3,397,225 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Finished goods</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>6,821,336 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>3,443,491 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.88%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>41,971,770 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:10.86%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>24,245,322 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:70.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:10.88%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:10.86%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;"><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font></font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Unvested</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Weighted&nbsp;-&nbsp;Average</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Restricted</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Grant&nbsp;Date</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Stock</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Fair&nbsp;Value</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Unvested, December&nbsp;31, 2016</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>129,666 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>8.12 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Granted</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>77,495 </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>19.54 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Vested</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>(24,130 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">)</font></p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>9.06 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 30pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Forfeited</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.88%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Unvested, April&nbsp;1, 2017</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>183,031 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.86%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>12.83 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.86%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;"><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font><font style="display:inline;;font-size: 10pt;font-family:Times New Roman,Times,serif;text-indent:0pt;margin-left:0pt;padding:0pt 36pt 0pt 0pt;"></font></font> </p> <div style="width:100%;"><table cellpadding="0" cellspacing="0" style="border-collapse:collapse;width: 100.00%;margin-left:0pt;"> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Weighted&nbsp;-&nbsp;Average</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="bottom" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-size:8pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Options</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 8pt;"> <font style="display:inline;font-weight:bold;font-size:8pt;">Exercise&nbsp;Price</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:center;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10.1pt;line-height:106.67%;text-indent: -10.1pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Outstanding, December&nbsp;31, 2016</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>17,850 </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.12%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.88%;background-color: #CCEEFF;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>2.12 </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt 0pt 0pt 20pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Exercised</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>(17,850 </td> <td valign="bottom" style="width:02.50%;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">)</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">$</font></p> </td> <td valign="bottom" style="width:14.86%;;font-family:Times New Roman,Times,serif;font-size:10pt;text-align:right;" nowrap="nowrap"><div style="float:left"></div>2.12 </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:1pt solid #000000 ;border-right:1pt none #D9D9D9 ;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.12%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:14.86%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt 0pt 0pt 10pt;line-height:106.67%;text-indent: -10pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">Outstanding, April&nbsp;1, 2017</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:12.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&#x2014;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td colspan="2" valign="bottom" style="width:16.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;text-align:right;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 10pt;"> &nbsp;</p> </td> </tr> <tr> <td valign="top" style="width:66.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:12.00%;border-top:1pt none #D9D9D9 ;border-left:1pt none #D9D9D9 ;border-bottom:2pt double #000000 ;border-right:1pt none #D9D9D9 ;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:02.50%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td colspan="2" valign="bottom" style="width:16.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> <td valign="bottom" style="width:01.00%;background-color: #CCEEFF;padding:0pt;"> <p style="margin:0pt;line-height:106.67%;font-family:Times New Roman,Times,serif;font-size: 1pt;"> <font style="display:inline;font-size:1pt;">&nbsp;</font></p> </td> </tr> </table></div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 9414951 10051472 227386 288607 77495 19.54 129666 183031 8.12 12.83 24130 218607 9.06 1000000 1012140 913731 17850 2.12 2.12 3003002 4110156 101731349 102819093 <div> <div> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;font-weight:bold;text-decoration:underline;">NOTE 7 &#x2014; COMMON STOCK</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">The Company declared and paid a three and one-half cents ($ 0.035) per share cash dividend to all Class&nbsp;A and Class&nbsp;B common stockholders during the quarter ended April&nbsp;1, 2017.&nbsp; The Company also paid a thirty cents ($0.30) per share dividend declared on November&nbsp;9, 2016, during the quarter ended April&nbsp;1, 2017. The dividend declared on November&nbsp;9, 2016 consisted of a special dividend of twenty six and one-half cents ($0.265) per share, in addition to a regular quarterly dividend of three and one-half cents ($0.035) per share.</font> </p> <p style="margin:0pt;font-family:Times New Roman,Times,serif;font-size: 10pt;"> <font style="display:inline;">&nbsp;</font> </p><div /></div> </div> 17850 17127836 17101080 16682812 17099107 EX-101.SCH 8 sts-20170401.xsd XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 00100 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS link:presentationLink link:calculationLink link:definitionLink 00200 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME link:presentationLink link:calculationLink link:definitionLink 00300 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS link:presentationLink link:calculationLink link:definitionLink 40201 - Disclosure - INVENTORIES (Details) link:presentationLink link:calculationLink link:definitionLink 00090 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 10101 - Disclosure - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT link:presentationLink link:calculationLink link:definitionLink 10201 - Disclosure - INVENTORIES link:presentationLink link:calculationLink link:definitionLink 10301 - Disclosure - FAIR VALUE MEASUREMENT link:presentationLink link:calculationLink link:definitionLink 10401 - Disclosure - DEBT link:presentationLink link:calculationLink link:definitionLink 10501 - Disclosure - STOCK-BASED COMPENSATION link:presentationLink link:calculationLink link:definitionLink 10601 - Disclosure - INCOME TAXES link:presentationLink link:calculationLink link:definitionLink 10701 - Disclosure - COMMON STOCK link:presentationLink link:calculationLink link:definitionLink 10801 - Disclosure - SALE OF TROLLEY BUSINESS link:presentationLink link:calculationLink link:definitionLink 10901 - Disclosure - COMMITMENTS AND CONTINGENCIES link:presentationLink link:calculationLink link:definitionLink 11001 - Disclosure - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS link:presentationLink link:calculationLink link:definitionLink 30203 - Disclosure - INVENTORIES (Tables) link:presentationLink link:calculationLink link:definitionLink 30503 - Disclosure - STOCK-BASED COMPENSATION (Tables) link:presentationLink link:calculationLink link:definitionLink 40101 - Disclosure - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT (Details) link:presentationLink link:calculationLink link:definitionLink 40401 - Disclosure - DEBT (Details) link:presentationLink link:calculationLink link:definitionLink 40501 - Disclosure - STOCK-BASED COMPENSATION (Details) link:presentationLink link:calculationLink link:definitionLink 40601 - Disclosure - INCOME TAXES (Details) link:presentationLink link:calculationLink link:definitionLink 40701 - Disclosure - COMMON STOCK (Details) link:presentationLink link:calculationLink link:definitionLink 40801 - Disclosure - SALE OF TROLLEY BUSINESS (Details) link:presentationLink link:calculationLink link:definitionLink 40901 - Disclosure - COMMITMENTS AND CONTINGENCIES (Details) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 9 sts-20170401_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT EX-101.LAB 10 sts-20170401_lab.xml XBRL TAXONOMY EXTENSION LABELS LINKBASE DOCUMENT EX-101.PRE 11 sts-20170401_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT EX-101.DEF 12 sts-20170401_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT XML 13 R1.htm IDEA: XBRL DOCUMENT v3.7.0.1
Document and Entity Information - shares
3 Months Ended
Apr. 01, 2017
Apr. 25, 2017
Entity Registrant Name SUPREME INDUSTRIES INC  
Entity Central Index Key 0000350846  
Document Type 10-Q  
Document Period End Date Apr. 01, 2017  
Amendment Flag false  
Current Fiscal Year End Date --12-30  
Entity Current Reporting Status Yes  
Entity Filer Category Accelerated Filer  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q1  
Common Class A    
Entity Common Stock, Shares Outstanding   15,499,507
Common Class B    
Entity Common Stock, Shares Outstanding   1,656,467
XML 14 R2.htm IDEA: XBRL DOCUMENT v3.7.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Apr. 01, 2017
Dec. 31, 2016
Current assets:    
Cash and cash equivalents $ 5,379,472 $ 35,222,620
Investments 4,110,156 3,003,002
Accounts receivable, net 33,869,415 20,106,253
Inventories 41,971,770 24,245,322
Other current assets 5,463,816 5,644,154
Total current assets 90,794,629 88,221,351
Property, plant and equipment, net 45,523,946 45,747,933
Total assets 136,318,575 133,969,284
Current liabilities:    
Current maturities of long-term debt 7,104,666 7,195,105
Trade accounts payable 13,885,164 6,803,769
Other accrued liabilities 10,155,251 16,057,283
Total current liabilities 31,145,081 30,056,157
Deferred income taxes 2,354,401 2,181,778
Total liabilities 33,499,482 32,237,935
Stockholders' equity 102,819,093 101,731,349
Total liabilities and stockholders' equity $ 136,318,575 $ 133,969,284
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
3 Months Ended
Apr. 01, 2017
Mar. 26, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME    
Net sales $ 68,674,699 $ 69,449,903
Cost of sales 55,678,922 54,289,246
Gross profit 12,995,777 15,160,657
Selling, general and administrative expenses 10,051,472 9,414,951
Other income (69,480) (36,476)
Operating income 3,013,785 5,782,182
Interest expense 245,403 182,829
Income before income taxes 2,768,382 5,599,353
Income tax expense 905,397 1,840,000
Net income 1,862,985 3,759,353
Other comprehensive income, net of tax 21,268 32,090
Comprehensive income $ 1,884,253 $ 3,791,443
Income per share:    
Basic (in dollars per share) $ 0.11 $ 0.23
Diluted (in dollars per share) $ 0.11 $ 0.22
Shares used in the computation of income per share:    
Basic (in shares) 17,099,107 16,682,812
Diluted (in shares) 17,101,080 17,127,836
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Apr. 01, 2017
Mar. 26, 2016
Cash flows from operating activities:    
Net income $ 1,862,985 $ 3,759,353
Adjustments to reconcile net income to net cash from operating activities:    
Depreciation and amortization 838,351 872,358
Deferred income taxes 172,623 (300,350)
Stock-based compensation expense 288,607 227,386
Gain on sale of property, plant and equipment, net (7,738) (300)
Changes in operating assets and liabilities (25,002,928) (9,382,120)
Net cash used in operating activities (21,848,100) (4,823,673)
Cash flows from investing activities:    
Additions to property, plant and equipment (539,046) (399,324)
Proceeds from sale of property, plant and equipment 8,650 300
Purchases of investments (1,088,737) (23,560)
Net cash used in investing activities (1,619,133) (422,584)
Cash flows from financing activities:    
Repayments of current maturities long-term debt (166,669) (166,667)
Payment of cash dividends (5,724,469) (5,572,859)
Treasury stock purchased (522,687) (161,769)
Proceeds from exercise of stock options 37,910 12,400
Net cash used in financing activities (6,375,915) (5,888,895)
Change in cash and cash equivalents (29,843,148) (11,135,152)
Cash and cash equivalents, beginning of period 35,222,620 17,247,891
Cash and cash equivalents, end of period $ 5,379,472 $ 6,112,739
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BASIS OF PRESENTATION AND OPINION OF MANAGEMENT
3 Months Ended
Apr. 01, 2017
BASIS OF PRESENTATION AND OPINION OF MANAGEMENT  
BASIS OF PRESENTATION AND OPINION OF MANAGEMENT

 

NOTE 1 — BASIS OF PRESENTATION AND OPINION OF MANAGEMENT

 

The accompanying unaudited condensed 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 accounting principles generally accepted in the United States of America.  In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair presentation of the interim periods reported.  The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.  References to “we,” “us,” “our,” “its,” “Supreme,” or the “Company” refer to Supreme Industries, Inc. and its subsidiaries.

 

The Company has adopted a 52- or 53-week fiscal year ending the last Saturday in December.  The results of operations for the three months ended April 1, 2017 and March 26, 2016 are for 13-week periods.

 

XML 18 R6.htm IDEA: XBRL DOCUMENT v3.7.0.1
INVENTORIES
3 Months Ended
Apr. 01, 2017
INVENTORIES  
INVENTORIES

 

NOTE 2 — INVENTORIES

 

Inventories, which are stated at the lower of cost or market with cost determined using the first-in, first-out method, consist of the following, net of applicable reserves of $1.2 million and $1.1 million as of April 1, 2017 and December 31, 2016, respectively:

 

 

 

April 1,

 

December 31,

 

 

 

2017

 

2016

 

Raw materials

 

$

29,862,338

 

$

17,404,606

 

Work-in-progress

 

5,288,096

 

3,397,225

 

Finished goods

 

6,821,336

 

3,443,491

 

 

 

 

 

 

 

 

 

$

41,971,770

 

$

24,245,322

 

 

 

 

 

 

 

 

 

 

XML 19 R7.htm IDEA: XBRL DOCUMENT v3.7.0.1
FAIR VALUE MEASUREMENT
3 Months Ended
Apr. 01, 2017
FAIR VALUE MEASUREMENT  
FAIR VALUE MEASUREMENT

 

NOTE 3 — FAIR VALUE MEASUREMENT

 

Generally accepted accounting principles (“GAAP”) define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The standard describes three levels of inputs that may be used to measure fair value:

 

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

 

Level 2: Significant other observable inputs (other than Level 1 prices such as quoted prices for similar assets or liabilities); quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

The Company used the following methods and significant assumptions to estimate the fair value of items:

 

Investments:  The fair values of investments available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).

 

Derivatives:  Our derivative instruments consist of an interest rate swap, currently reflected as other accrued liabilities on the Condensed Consolidated Balance Sheets. The Company obtains fair values from financial institutions that utilize internal models with observable market data inputs to estimate the fair value of these instruments (Level 2 inputs).

 

The carrying amounts of cash and cash equivalents, accounts receivable, and trade accounts payable approximated fair value as of April 1, 2017 and December 31, 2016, because of the relatively short maturities of these financial instruments. The carrying amount of current maturities of long-term debt approximated fair value as of April 1, 2017 and December 31, 2016, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt.

 

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DEBT
3 Months Ended
Apr. 01, 2017
DEBT  
DEBT

 

NOTE 4 — DEBT

 

Credit Agreement

 

On December 19, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). Under the terms of the Credit Agreement, Wells Fargo agreed to provide to the Company a credit facility of up to $45.0 million, consisting of a revolving credit facility, a term loan facility, and a letter of credit facility.  The Company had unused credit capacity of $35.0 million at April 1, 2017. Interest on outstanding borrowings under the Credit Agreement is based on Wells Fargo’s prime rate or LIBOR depending on the pricing option selected and the Company’s leverage ratio (as defined in the Credit Agreement) resulting in an effective interest rate of 3.06% at April 1, 2017 and 3.05% at December 31, 2016.  Pursuant to the Credit Agreement, the financial covenants include a consolidated total leverage ratio, a consolidated fixed charge coverage ratio, a limitation on annual capital expenditures, and a limitation on quarterly cash dividends. As of April 1, 2017 and December 31, 2016, the Company was in compliance with all financial covenants. The Credit Agreement is for a period of five years ending on December 19, 2017.  The Company expects to enter into a new credit agreement before the Credit Agreement expires.

 

Revolving Credit Facility

 

The revolving credit facility provides for borrowings of up to $35.0 million. The revolving credit facility bears interest at (i) LIBOR plus a margin which varies from 1.50% to 2.50% based upon a leverage ratio of total indebtedness to trailing four quarter EBITDA or (ii) the higher of (a) the prime rate and (b) the federal funds rate plus 0.50% plus a margin which varies from 0.50% to 1.50% based upon the debt to EBITDA leverage ratio. The revolving credit facility also requires a quarterly commitment fee ranging from 0.20% to 0.50% per annum depending on the Company’s financial ratios and based upon the average daily unused portion.  As of April 1, 2017, and December 31, 2016, there were no borrowings against the revolving credit facility.

 

Term Loan Facility

 

The term loan facility provides for borrowings of up to $10.0 million. The term loan is secured by real estate and improvements, payable in quarterly installments of $166,667 commencing on June 28, 2013, plus interest at prime rate or LIBOR, with the remaining balance due upon maturity on December 19, 2017. As of April 1, 2017 and December 31, 2016, the outstanding balance under the term loan facility was $7.3 million and $7.5 million, respectively.

 

On August 9, 2013, the Company entered into an interest rate swap agreement for a portion of the term loan with a notional amount of $5.0 million. The interest rate swap agreement provides for a 3.1% fixed interest rate and matures on December 19, 2017. The Company designated this swap agreement as a cash flow hedge on its variable rate debt and records the fair value of the swap agreement as an asset or liability on the balance sheet, with changes in fair value recognized in other comprehensive income (loss).

 

Letter of Credit Facility

 

Outstanding letters of credit, related to the Company’s workers’ compensation insurance policies, reduce available borrowings under the Credit Agreement. During 2014, the Company replaced all outstanding letters of credit with cash deposits with its insurance carriers. As of April 1, 2017 and December 31, 2016, cash deposits with insurance carriers totaled $1.9 million.

 

XML 21 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK-BASED COMPENSATION
3 Months Ended
Apr. 01, 2017
STOCK-BASED COMPENSATION  
STOCK-BASED COMPENSATION

 

NOTE 5 — STOCK-BASED COMPENSATION

 

The following table summarizes the activity for the outstanding stock options for the three months ended April 1, 2017:

 

 

 

 

 

Weighted - Average

 

 

 

Options

 

Exercise Price

 

Outstanding, December 31, 2016

 

17,850

 

$

2.12

 

Exercised

 

(17,850

)

$

2.12

 

 

 

 

 

 

 

 

Outstanding, April 1, 2017

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes the activity for the unvested restricted stock for the three months ended April 1, 2017:

 

 

 

Unvested

 

Weighted - Average

 

 

 

Restricted

 

Grant Date

 

 

 

Stock

 

Fair Value

 

Unvested, December 31, 2016

 

129,666

 

$

8.12

 

Granted

 

77,495

 

$

19.54

 

Vested

 

(24,130

)

$

9.06

 

Forfeited

 

 

$

 

 

 

 

 

 

 

 

Unvested, April 1, 2017

 

183,031

 

$

12.83

 

 

 

 

 

 

 

 

 

The total fair value of restricted shares vested and recognized as stock-based compensation expense during the three months ended April 1, 2017 was $218,607.

 

As a part of annual director compensation, a stock award is paid to each of the Company’s outside directors equal to $40,000 divided by the closing sales price on the grant date. The grants are made in quarterly increments. The director stock-based compensation expense recognized during the three months ended April 1, 2017 was $70,000.

 

Total unrecognized compensation expense related to all share-based awards outstanding at April 1, 2017, was approximately $2.3 million and is to be recorded over a weighted-average contractual life of 2.4 years.

 

On May 25, 2016, the Company held its annual meeting of stockholders at which the Company’s stockholders approved the 2016 Long-Term Incentive Plan (the “Plan”) which had previously been approved by the Board of Directors and recommended to the stockholders. The Plan is effective until May 25, 2026; provided, however, any awards issued prior to the Plan’s termination will remain outstanding in accordance with their terms. The Plan authorizes the issuance of 1,000,000 shares of the Company’s Class A Common Stock with certain officers being limited to receiving grants of 100,000 shares in any one year. Employees, contractors and non-employee directors of the Company and its subsidiaries are eligible to receive awards under the Plan. The following types of awards may be granted under the Plan:  (1) stock options (incentive and non-qualified); (2) stock appreciation rights; (3) restricted stock and restricted stock units; (4) dividend equivalent rights; (5) performance awards based on achieving specified performance goals; and (6) other awards. As of April 1, 2017, shares reserved for the granting of future share-based awards totaled 913,731, compared to 1,012,140 shares at December 31, 2016.

 

XML 22 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES
3 Months Ended
Apr. 01, 2017
INCOME TAXES  
INCOME TAXES

 

NOTE 6 — INCOME TAXES

 

For the three months ended April 1, 2017, the Company recorded income tax expense of $0.9 million at an effective tax rate of 32.7% compared with $1.8 million at an effective tax rate of 32.9% for the three months ended March 26, 2016.  The rates differ from the federal statutory rate primarily because of varying state income tax rates and permanent federal income tax differences including benefits from a captive insurance company and the allowable domestic manufacturer deduction.

 

XML 23 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMON STOCK
3 Months Ended
Apr. 01, 2017
COMMON STOCK  
COMMON STOCK

 

NOTE 7 — COMMON STOCK

 

The Company declared and paid a three and one-half cents ($ 0.035) per share cash dividend to all Class A and Class B common stockholders during the quarter ended April 1, 2017.  The Company also paid a thirty cents ($0.30) per share dividend declared on November 9, 2016, during the quarter ended April 1, 2017. The dividend declared on November 9, 2016 consisted of a special dividend of twenty six and one-half cents ($0.265) per share, in addition to a regular quarterly dividend of three and one-half cents ($0.035) per share.

 

XML 24 R12.htm IDEA: XBRL DOCUMENT v3.7.0.1
SALE OF TROLLEY BUSINESS
3 Months Ended
Apr. 01, 2017
SALE OF TROLLEY BUSINESS  
SALE OF TROLLEY BUSINESS

 

NOTE 8 — SALE OF TROLLEY BUSINESS

 

On May 11, 2016, the Company entered into an Asset Purchase Agreement for the sale of certain assets of the Company’s trolley business. Trolley products represented less than 1% of the Company’s consolidated net sales for the first three months of 2017 and approximately 2% for the first three months of 2016.  The after-tax impact on consolidated operations for both periods was immaterial.  The first stage of the transaction closed on June 30, 2016 and the final stage of the transaction is scheduled to close in the second quarter of 2017.  The Company anticipates no material gain or loss will be recognized on the sale.  The sale of the trolley business does not meet the criteria of the Financial Accounting Standards Board (“FASB”) ASU 2014-8 (Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity) and will not be reported as discontinued operations.

 

 

XML 25 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES
3 Months Ended
Apr. 01, 2017
COMMITMENTS AND CONTINGENCIES  
COMMITMENTS AND CONTINGENCIES

 

NOTE 9 — COMMITMENTS AND CONTINGENCIES

 

The Company is subject to various investigations, claims, and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities, certain of which are covered in whole or in part by insurance.  The Company establishes accruals for these matters to the extent that losses are deemed probable and are reasonably estimable.  Although the outcome of these matters cannot be fully determined on the basis of information currently available, it is the opinion of management that the ultimate outcome of these matters would not be significant to the Company’s consolidated financial position, results of operations, or cash flow.

 

On January 3, 2017, an amended complaint was filed against the Company’s subsidiary, Supreme Corporation, in a suit (SVI, Inc. v. Supreme Corporation, Hometown Trolley (a/k/a Double K, Inc.) and Dustin Pence) in the United States District Court, District of Nevada.  The amended complaint (original complaint filed on May 16, 2016), filed by Supreme Corporation’s former trolley distributor, alleges that Supreme Corporation’s sale of its trolley assets to another trolley manufacturer was improper.  Claims alleged against Supreme Corporation include: (i) misappropriation of trade secrets; (ii) civil conspiracy/collusion; (iii) tortious interference with contractual relationships; (iv) tortious interference with prospective economic advantage; (v) unjust enrichment; (vi) breach of contract; (vii) breach of the covenant of good faith and fair dealing; (viii) breach of fiduciary duties; (ix) promissory estoppel; (x) declaratory relief establishing a joint venture or partnership; and (xi) cancellation of a trademark registration.  The plaintiff alleges that the net present value of the amount lost by the plaintiff is approximately $40,000,000.  Supreme Corporation has filed a motion to dismiss which is pending.  Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.

 

On November 4, 2016, a putative class action lawsuit was filed against the Company, Mark Weber (the Company’s Chief Executive Officer) and Matthew W. Long (the Company’s Chief Financial Officer) in the United States District Court for the Central District of California alleging the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 by making material, misleading statements in July 2016 regarding projected backlog.  The plaintiff seeks to recover unspecified damages.  On February 14, 2017, the court transferred the venue of the case to the Northern District of Indiana upon the joint stipulation of the plaintiff and the defendants.  An amended complaint was filed on April 24, 2017 challenging statements made during a putative class period of October 22, 2015 through October 21, 2016.  Due to the inherent risk of litigation, the outcome of this case is uncertain and unpredictable; however, at this time, management believes that the allegations are without merit and is vigorously defending the matter.

 

XML 26 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
3 Months Ended
Apr. 01, 2017
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS  
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

NOTE 10 — RECENTLY ISSUED ACCOUNTING PRONOUCEMENTS

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 (as updated by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20) is for annual periods, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for years beginning after December 15, 2016, to be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effects of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position, however, this new accounting guidance may require enhanced footnote disclosures.  The Company will adopt the accounting standard during the first quarter of 2018 as required, but has not yet decided on a transition method.

 

In February 2016, the FASB issued ASU 2016-02, Leases.  The ASU provides guidance that will require an entity to recognize lease assets and lease liabilities on its balance sheet for leases in excess of one year that were previously classified as operating leases under U.S. GAAP. The guidance also requires companies to disclose in the footnotes to the financial statements information about the amount, timing, and uncertainty of the payments made for the lease agreements. The guidance is effective for financial statements issued for annual and interim periods beginning after December 15, 2018 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position.

 

XML 27 R15.htm IDEA: XBRL DOCUMENT v3.7.0.1
INVENTORIES (Tables)
3 Months Ended
Apr. 01, 2017
INVENTORIES  
Schedule of inventories

 

 

April 1,

 

December 31,

 

 

 

2017

 

2016

 

Raw materials

 

$

29,862,338

 

$

17,404,606

 

Work-in-progress

 

5,288,096

 

3,397,225

 

Finished goods

 

6,821,336

 

3,443,491

 

 

 

 

 

 

 

 

 

$

41,971,770

 

$

24,245,322

 

 

 

 

 

 

 

 

 

 

XML 28 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK-BASED COMPENSATION (Tables)
3 Months Ended
Apr. 01, 2017
STOCK-BASED COMPENSATION  
Summary of the activity for the outstanding stock options

 

 

 

 

Weighted - Average

 

 

 

Options

 

Exercise Price

 

Outstanding, December 31, 2016

 

17,850

 

$

2.12

 

Exercised

 

(17,850

)

$

2.12

 

 

 

 

 

 

 

 

Outstanding, April 1, 2017

 

 

 

 

 

 

 

 

 

 

 

Summary of the activity for the unvested restricted stock

 

 

Unvested

 

Weighted - Average

 

 

 

Restricted

 

Grant Date

 

 

 

Stock

 

Fair Value

 

Unvested, December 31, 2016

 

129,666

 

$

8.12

 

Granted

 

77,495

 

$

19.54

 

Vested

 

(24,130

)

$

9.06

 

Forfeited

 

 

$

 

 

 

 

 

 

 

 

Unvested, April 1, 2017

 

183,031

 

$

12.83

 

 

 

 

 

 

 

 

 

XML 29 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
BASIS OF PRESENTATION AND OPINION OF MANAGEMENT (Details)
3 Months Ended
Apr. 01, 2017
Mar. 26, 2016
Basis of presentation and opinion of management    
Length of fiscal quarters 91 days 91 days
Minimum    
Basis of presentation and opinion of management    
Length of fiscal years 364 days  
Maximum    
Basis of presentation and opinion of management    
Length of fiscal years 371 days  
XML 30 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
INVENTORIES (Details) - USD ($)
Apr. 01, 2017
Dec. 31, 2016
INVENTORIES    
Inventory reserves $ 1,200,000 $ 1,100,000
Raw materials 29,862,338 17,404,606
Work-in-progress 5,288,096 3,397,225
Finished goods 6,821,336 3,443,491
Total $ 41,971,770 $ 24,245,322
XML 31 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
DEBT (Details) - USD ($)
3 Months Ended
Jun. 28, 2013
Dec. 19, 2012
Apr. 01, 2017
Dec. 31, 2016
Aug. 09, 2013
Amended And Restated Credit Agreement | Wells Fargo          
Debt.          
Maximum borrowing capacity   $ 45,000,000      
Term of credit agreement   5 years      
Unused credit capacity under the agreement     $ 35,000,000    
Amended And Restated Credit Agreement | Wells Fargo | Prime Rate [Member]          
Debt.          
Effective interest rate (as a percent)     3.06% 3.05%  
Variable interest rate basis     prime rate    
Amended And Restated Credit Agreement | Wells Fargo | London Interbank Offered Rate L I B O R [Member]          
Debt.          
Variable interest rate basis     LIBOR    
Revolving Credit Facility | Wells Fargo          
Debt.          
Maximum borrowing capacity     $ 35,000,000    
Borrowings outstanding under credit facility     $ 0 $ 0  
Revolving Credit Facility | Wells Fargo | Prime Rate [Member]          
Debt.          
Variable interest rate basis     prime rate    
Revolving Credit Facility | Wells Fargo | London Interbank Offered Rate L I B O R [Member]          
Debt.          
Variable interest rate basis     LIBOR    
Revolving Credit Facility | Wells Fargo | Debt Instrument Variable Rate Federal Funds Rate [Member]          
Debt.          
Variable interest rate basis     federal funds rate    
Basis spread on variable interest rate basis (as a percent)     0.50%    
Revolving Credit Facility | Wells Fargo | Minimum          
Debt.          
Quarterly commitment fee (as a percent)     0.20%    
Revolving Credit Facility | Wells Fargo | Minimum | London Interbank Offered Rate L I B O R [Member]          
Debt.          
Basis spread on variable interest rate basis (as a percent)     1.50%    
Revolving Credit Facility | Wells Fargo | Minimum | Base Rate [Member]          
Debt.          
Basis spread on variable interest rate basis (as a percent)     0.50%    
Revolving Credit Facility | Wells Fargo | Maximum          
Debt.          
Quarterly commitment fee (as a percent)     0.50%    
Revolving Credit Facility | Wells Fargo | Maximum | London Interbank Offered Rate L I B O R [Member]          
Debt.          
Basis spread on variable interest rate basis (as a percent)     2.50%    
Revolving Credit Facility | Wells Fargo | Maximum | Base Rate [Member]          
Debt.          
Basis spread on variable interest rate basis (as a percent)     1.50%    
Secured Debt [Member] | Interest Rate Swap | Cash Flow Hedging          
Debt.          
Notional amount         $ 5,000,000
Fixed interest rate (as a percent)         3.10%
Secured Debt [Member] | Wells Fargo          
Debt.          
Maximum borrowing capacity     $ 10,000,000    
Principal amount payable in quarterly installments $ 166,667        
Term loan facility     $ 7,300,000 7,500,000  
Secured Debt [Member] | Wells Fargo | Prime Rate [Member]          
Debt.          
Variable interest rate basis     prime rate    
Secured Debt [Member] | Wells Fargo | London Interbank Offered Rate L I B O R [Member]          
Debt.          
Variable interest rate basis     LIBOR    
Letter Of Credit          
Debt.          
Aggregate outstanding amount     $ 1,900,000 $ 1,900,000  
XML 32 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCK-BASED COMPENSATION (Details) - USD ($)
3 Months Ended
Apr. 01, 2017
Dec. 31, 2016
May 25, 2016
Stock-based compensation, additional disclosure      
Total unrecognized compensation expense $ 2,300,000    
Recognition of unrecognized compensation expense over weighted average contractual life 2 years 4 months 24 days    
Shares reserved for the grant of future share-based awards 913,731 1,012,140  
Director [Member]      
Stock-based compensation, additional disclosure      
Annual stock award paid as compensation to outside directors $ 40,000    
Stock-based compensation expense $ 70,000    
Employee And Nonemployee Stock Option      
Options      
Outstanding at the beginning of the period (in shares) 17,850    
Exercised (in shares) (17,850)    
Weighted - Average Exercise Price      
Outstanding at the beginning of the period (in dollars per share) $ 2.12    
Exercised (in dollars per share) $ 2.12    
Employee And Nonemployee Stock Option | 2016 Plan | Common Class A      
Stock-based compensation, additional disclosure      
Shares available for grant     1,000,000
Employee And Nonemployee Stock Option | 2016 Plan | Common Class A | Maximum      
Stock-based compensation, additional disclosure      
Number of shares that can be granted in any one year 100,000    
Restricted Stock [Member]      
Number of Shares      
Unvested at the beginning of the period (in shares) 129,666    
Granted (in shares) 77,495    
Vested (in shares) (24,130)    
Unvested at the end of the period (in shares) 183,031    
Weighted - Average Grant Date Fair Value      
Unvested at the beginning of the period (in dollars per share) $ 8.12    
Granted (in dollars per share) 19.54    
Vested (in dollars per share) 9.06    
Unvested at the end of the period (in dollars per share) $ 12.83    
Total fair value of shares vested and recognized as stock-based compensation expense during the year $ 218,607    
Stock-based compensation, additional disclosure      
Granted (in shares) 77,495    
XML 33 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES (Details) - USD ($)
3 Months Ended
Apr. 01, 2017
Mar. 26, 2016
INCOME TAXES    
Income tax expense $ 905,397 $ 1,840,000
Effective tax rate (as a percent) 32.70% 32.90%
XML 34 R22.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMON STOCK (Details) - $ / shares
3 Months Ended
Nov. 09, 2016
Apr. 01, 2017
Cash dividend declared $ 0.300  
Cash dividend paid   $ 0.035
Special cash dividend $ 0.265  
Common Class A and B    
Common stock dividends declared and paid   $ 0.035
XML 35 R23.htm IDEA: XBRL DOCUMENT v3.7.0.1
SALE OF TROLLEY BUSINESS (Details) - Trolley Business - Disposed of by sale
3 Months Ended
Apr. 01, 2017
Mar. 26, 2016
Discontinued operations    
Concentration risk (as a percent)   2.00%
Maximum    
Discontinued operations    
Concentration risk (as a percent) 1.00%  
XML 36 R24.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES (Details)
Jan. 03, 2017
USD ($)
Amended Complaint  
Loss contingencies  
Net present value of amount lost by plaintiff $ 40,000,000
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