Supreme Industries Reports Third-Quarter and Nine-Month 2009 Financial Results

GOSHEN, Ind.--(BUSINESS WIRE)--Supreme Industries, Inc. (NYSE Amex: STS), a leading manufacturer of specialized commercial vehicles, including truck bodies, shuttle buses, armored vehicles and homeland response vehicles, today announced financial results for its third quarter and nine months ended Sept. 26, 2009.

Supreme continued to experience the impact of the economic recession. Third-quarter 2009 net sales were off 18 percent to $50.1 million from $61.1 million in the same period a year ago. For the first nine months of 2009, net sales declined 30 percent to $149.0 million, versus $212.3 million in 2008’s first nine months. Total sales backlog stood at $61.9 million, versus $64.9 million as of September 2008.

The Company’s reported net loss was $1.5 million, or $0.11 per share, versus a net loss of $0.6 million, or $0.04 per share, in last year’s comparable quarter. For the first nine months of 2009, Supreme reported a net loss of $4.0 million, or $0.28 per share, compared with the 2008 net loss of $0.2 million, or $0.01 per diluted share.

Commenting on the results, Supreme President and Chief Operating Officer Robert W. Wilson said: “During 2009, we incurred losses primarily due to the decline in the commercial truck market over the past 12 months, which is down approximately 40 percent according to the latest Polk report, an industry commentary on the U.S. commercial vehicle market. With core dry freight trucks and related products having historically represented approximately 65 percent of our revenues on average over prior periods, our revenues have been dramatically affected by these conditions. To date, we have reduced our annualized operating costs in excess of $15 million to help mitigate the effects of the decline in our core truck revenue. We are continually executing a strategy to improve our operational processes, reduce costs and research new materials to increase value to our customers, with an emphasis on ‘green’ materials and technologies, while also upgrading existing and developing new product offerings.”

Gross profit margin as a percentage of net sales was 7.8 percent for the 2009 quarter and 6.9 percent for the nine-months. This compares with 8.9 percent and 9.6 percent, respectively, for the like periods of 2008. The year-over-year contraction for both periods was due primarily to lower sales volume and the effect of fixed manufacturing overhead costs.

Selling, general and administrative expenses decreased $1.5 million, or 22 percent, to $5.3 million for the third quarter, and for the nine months, were 21 percent lower at $16.5 million. This compares with SG&A expenses of $6.8 million and $20.8 million for the respective periods in 2008. The decrease was primarily attributable to employee headcount and related cost reductions, which, the Company indicated, are a large part of the cost-savings initiatives begun in late 2008.

Interest expense was $0.6 million and $1.8 million, respectively, for the third quarter and first nine months of 2009, compared with $0.5 million and $1.6 million for the corresponding periods in 2008.

Cash provided by operating activities for the first nine months of 2009 totaled $10.7 million—up from $4.3 million in the comparable period last year. At Sept. 26, 2009, working capital totaled $27.0 million and the working capital ratio was 1.7 to 1. Total debt was reduced by $11.4 million during the year’s first nine months and, as a percentage of total assets, stood at 20.4 percent, versus 26.8 percent at Dec. 27, 2008. Management reclassified long-term bank debt as a current liability at quarter-end based on interpretation of accounting regulations as they relate to certain terms in the Company’s current bank agreement. This reclassification aligns the liability with the corresponding current assets. Stockholders’ equity was $67.0 million, or $4.72 per share, at quarter-end, compared with $70.4 million, or $4.98 per share, at Dec. 27, 2008.

Wilson concluded: “We believe the truck market is building pent-up demand as the average age of vehicles in use is estimated to be more than nine years, compared with the historic average of six years. However, when we will benefit from this market condition is unclear. On the other hand, our armored and bus divisions are anticipated to perform favorably for the balance of 2009 and into 2010. Our focus is to lower our cost structure (particularly in the truck division), restore profitability as soon as possible, maximize cash flows and reduce debt.”

A live webcast of Supreme Industries' earnings conference call can be heard tomorrow at 9:00 a.m. Eastern Time at http://www.SupremeInd.com. Those unable to participate in the live conference call may access a replay, which will be available on the Company’s website for approximately 30 days.

To be added to Supreme Industries’ e-mail distribution list, please click on the link below: http://www.clearperspectivegroup.com/clearsite/sts/emailoptin.html

News releases and other information on the Company are available on the Internet at: http://www.SupremeInd.com or http://www.b2i.us/irpass.asp?BzID=1482&to=ea&s=0

About Supreme Industries

Supreme Industries, Inc. (NYSE Amex: STS), is a nationwide manufacturer of specialized truck bodies produced to the specifications of its customers. Supreme also manufactures special-purpose “shuttle-type” buses, armored vehicles and homeland response vehicles. The Company's transportation equipment products are used by a wide variety of industrial, commercial, law enforcement and Homeland Security customers.

This report contains forward-looking statements, 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,” 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, limitations on the availability of chassis on which the Company’s product is dependent, availability of raw materials, raw material cost increases and severe interest rate increases. Furthermore, the Company can provide no assurance that such raw material cost increases can be passed on to its customers through implementation of price increases for the Company’s products. The forward-looking statements contained herein reflect the current 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.

─FINANCIAL TABLES FOLLOW─

Supreme Industries, Inc. and Subsidiaries Consolidated Statements of Operations

	Three Months Ended						Nine Months Ended
	Sept. 26,			Sept. 27,			Sept. 26,			Sept. 27,
		2009			2008			2009			2008

Net sales	$	50,101,178		$	61,086,346		$	148,978,349		$	212,317,770
Cost of sales		46,215,513			55,666,495			138,652,416			191,907,710

Gross profit		3,885,665			5,419,851			10,325,933			20,410,060

Selling, general and administrative expenses		5,328,645			6,797,403			16,511,198			20,787,125
Other income		(102,972	)		(160,959	)		(780,998	)		(670,470	)

Operating income (loss)		(1,340,008	)		(1,216,593	)		(5,404,267	)		293,405

Interest expense		623,566			508,368			1,780,330			1,625,273

Loss before income taxes		(1,963,574	)		(1,724,961	)		(7,184,597	)		(1,331,868	)

Income tax benefit		(435,000	)		(1,094,910	)		(3,151,000	)		(1,144,910	)

Net loss	$	(1,528,574	)	$	(630,051	)	$	(4,033,597	)	$	(186,958	)


Loss Per Share (LPS):
Basic	$	(0.11	)	$	(0.04	)	$	(0.28	)	$	(0.01	)
Diluted		(0.11	)		(0.04	)		(0.28	)		(0.01	)

Shares used in the computation of LPS:
Basic		14,198,782			14,186,973			14,180,168			14,073,863
Diluted		14,198,782			14,186,973			14,180,168			14,073,863

Cash dividends per common share	$	-		$	-		$	-		$	0.19

Supreme Industries, Inc. and Subsidiaries Consolidated Condensed Balance Sheets

	Sept. 26,		Dec. 27,
		2009		2008

Assets
Current assets	$	64,909,634	$	79,450,554
Property, plant and equipment, net		43,154,887		45,778,908
Other assets		1,183,544		295,109

Total assets	$	109,248,065	$	125,524,571

Liabilities
Current liabilities	$	37,876,317	$	19,114,554
Long-term debt		1,335,675		32,805,350
Deferred income taxes		2,403,698		2,403,698
Other long-term liabilities		585,158		818,053
Total liabilities		42,200,848		55,141,655
Total stockholders’ equity		67,047,217		70,382,916

Total liabilities and stockholders’ equity	$	109,248,065	$	125,524,571