Supreme Industries, Inc.
(NYSE MKT: STS)
, a leading manufacturer of specialized commercial vehicles including truck bodies, shuttle buses, and armored vehicles, today announced earnings for its second quarter ended June 29, 2013. All earnings per share and share figures have been adjusted for the 5% stock dividend paid in the second quarter of 2013.
2013 Second-Quarter Results
Consolidated net sales of $76.5 million for the second quarter declined 9.5% compared with $84.6 million last year. The revenue decrease was attributable to lower sales volume with bus and fleet truck customers versus the prior year, partially offset by higher sales of retail trucks.
Gross margin as a percentage of sales improved to 17.8%, or $13.6 million, compared with 16.0%, or $13.5 million, in the second quarter of 2012, and sequentially from 17.3%, or $11.4 million, in the first quarter of 2013 due to improved product mix and manufacturing efficiencies.
During the quarter, Supreme settled its King County, Washington, lawsuit, which resulted in a $3.4 million pre-tax charge. The legal settlement and related costs totaled $4.5 million, partially offset by $1.1 million of estimated value assigned to the returned product. Due to the inherent risk of litigation and the uncertainty of the outcome, the Company determined that it was in its best interest to bring this matter to resolution and therefore agreed to a settlement.
Income tax expense of $0.4 million was recorded in the quarter due to the Company’s return to normalized statutory rates. In 2012’s comparable period, the Company recorded an income tax benefit of $0.3 million resulting from the reversal of a deferred tax valuation allowance due to the improved profitability.
Net income for the second quarter was $0.9 million, or $0.06 per diluted share, compared with net income of $5.4 million, or $0.33 per diluted share, last year. On a proforma basis, diluted earnings per share, adjusting for the legal settlement costs and normalizing of the 2012 income tax expense, resulted in $0.20 per diluted share for the second quarter of 2013 compared with $0.21 per diluted share a year ago.