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Supreme Industries, Inc.
(NYSE MKT: STS), a leading manufacturer of specialized commercial vehicles, including truck bodies, shuttle buses and armored vehicles, today announced improved earnings for its second quarter ended June 30, 2012.
Consolidated net sales decreased 10.7% to $84.6 million for the second quarter, down from $94.7 million in last year’s comparable period. Gross profit improved 68% to $13.5 million from last year’s $8.1 million. Gross profit, as a percentage of sales, increased to 16.0%, compared with 8.5% in the second quarter of 2011, and 15.0% in the first quarter of 2012. The year-over-year gross margin improvement is primarily due to product price increases, stabilizing materials pricing, favorable product mix and improved labor efficiencies.
The Company reported net income from continuing operations of $5.4 million, or $0.35 per diluted share, for the quarter, compared with a loss from continuing operations of $0.8 million, or $0.05 per share, in the second quarter of last year. Net income improved to $0.35 per diluted share, reversing the year-ago net loss of $0.07 per share, which included the impact from discontinued operations. Last year’s second-quarter results were negatively impacted by a $1.9 million legal settlement.
The current year’s $0.3 million tax benefit, recorded in the second quarter, resulted primarily from the release of a tax valuation allowance due to the Company’s profitability. The Company expects that the balance of the valuation allowance will be utilized during the second half of 2012 consistent with the Company’s expected tax position, resulting in an effective tax rate of 1.5% for the full year 2012. The tax rate for 2013 and beyond is anticipated to be significantly higher than that of 2012. The 2011 net loss does not reflect any income tax benefit due to the continuing losses of the Company.
Supreme’s Chief Financial Officer and Interim Chief Executive Officer Matthew Long said: “We have a year of consistent, improving profitability confirming we have turned the corner. The operational improvements that began to be realized during the third quarter of 2011 have continued through the first half of 2012. In each of the past four quarters, we have generated sequentially higher gross margins and net income. This positive trend reinforces our ongoing strategy to focus on profitable revenues.”