GOSHEN, IN - Supreme Industries, Inc., a manufacturer of specialized commercial vehicles, including truck bodies, shuttle buses, and armored vehicles, announced financial results for its third quarter and nine months ended Sept. 25.
Net sales for the 2010 third quarter rose 26 percent to $62.8 million from $49.8 million in last year's comparable period. For the first nine months, net sales reached $171.9 million, up 18 percent from $146.0 million in 2009.
Moving into the year's second half, Supreme continued to experience improved demand for all major product lines including truck, bus and armored vehicles. Sales order backlog at Sept. 25, 2010, grew 44 percent to $89 million from $62 million a year ago.
Compared with last year's third quarter, sales in Supreme's core dry-freight truck and armored vehicle divisions advanced 33 percent and 109 percent, respectively. The Company's bus division posted a 4-percent sales increase versus the prior-year period. Net sales also improved in each of Supreme's primary product lines during the first nine months of 2010, with dry-freight trucks, buses and armored vehicles reporting gains of 18 percent, 16 percent, and 31 percent, respectively.
The third-quarter loss from continuing operations was $0.1 million, or $0.01 per share, compared with the $1.3 million loss, or $0.09 per share, reported for the year-ago quarter. For the first nine months of 2010, the net loss from continuing operations was $2.6 million, or $0.18 per share, compared with the net loss of $3.4 million, or $0.23 per share, in 2009's comparable period. The Company did not record an income tax benefit for the three and nine months ended Sept. 25, 2010, due to having fully utilized its loss carryback benefits in 2009.
Commenting on the results, President and Chief Operating Officer Robert W. Wilson said: "As anticipated, we experienced firmer demand across all of our major product categories. Order activity continued to ramp up compared with last year as evidenced by our higher backlog and increased activity from fleet customers. We already have a large fleet order on the books for spring 2011. However, we will continue to maintain a conservative and cautious view of our markets as we move forward."
Third-quarter gross profit increased 39 percent to $5.7 million from $4.1 million last year. Gross profit margin as a percentage of net sales improved to 9.1 percent for the 2010 third quarter and 8.8 percent for the nine months, compared with 8.2 percent in the third quarter and 7.4 percent in the first nine months of 2009. The year-over-year gross margin increases for both periods were primarily the result of higher unit volumes and benefits from implemented cost reductions.
As a percentage of sales, selling, general and administrative expenses decreased 1.4 percent to 9.1 percent for the 2010 third quarter, and were down 1.1 percent to 9.9 percent for the nine months. SG&A totaled $5.7 million for the third quarter and $17.0 million for the nine months, compared with $5.2 million and $16.1 million for the respective 2009 periods. The higher total SG&A expenses for both periods are associated with increased sales volumes and are primarily attributable to elevated selling expenses.
Interest expense declined 40 percent to $0.3 million and 20 percent to $1.2 million for the third quarter and nine months, respectively, compared with $0.5 million and $1.5 million for the corresponding periods of 2009. Interest expense benefited from improved management of bailment chassis inventories, lower interest rates and reduced debt levels. Total debt declined 14 percent from year-end 2009 to $23.5 million, and as a percentage of total assets, improved to 21.9 percent versus 25 percent.
Net cash provided by operating activities during the first nine months of 2010 totaled $2.6 million. Working capital was $21.8 million at Sept. 25, 2010, compared with $21.5 million at year-end 2009, and the working capital ratio was steady at 1.5 to 1. Stockholders' equity was $60.6 million, or $4.23 per share, at the end of the third quarter, compared with $62.6 million, or $4.40 per share, at Dec. 26, 2009.
Wilson concluded: "We previously indicated that historically low order rates from fleet operators over the past few years have resulted in pent-up demand. We are starting to see fleet operators return to the market and recently have been bidding on and winning some large fleet awards. We are hopeful that this trend for our core dry-freight truck business will continue into 2011."
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