Supreme Industries, Inc.
(NYSE MKT: STS)
, a leading manufacturer of specialized commercial vehicles including truck bodies and specialty vehicles, today announced financial results for its fourth quarter ended December 28, 2013. All earnings per share and share figures have been adjusted for the 5% stock dividend distributed in the second quarter of 2013.
2013 Fourth-Quarter Results
Consolidated net sales for the fourth quarter increased 25.6%, to $72.5 million, compared with $57.7 million last year. The revenue increase was attributable to a fall fleet build and improved retail demand for truck bodies, partially offset by lower sales volume in the specialty vehicle and bus divisions.
Gross margin expanded to 15.2% of quarterly sales, compared with 13.2% in last year’s fourth quarter, despite margin pressure in the bus product line. The margin improvement, combined with higher net sales, drove gross profit up to $11.1 million, or a 45.7% increase from the $7.6 million reported in the fourth quarter of 2012. The margin expansion is primarily due to product mix, continued manufacturing efficiency improvements and higher capacity utilization.
An income tax expense of $0.7 million was recorded in the quarter due to the Company’s return to normalized tax rates. In last year’s comparable period, the Company recorded an income tax benefit of $0.1 million that included the reversal of a deferred tax valuation allowance due to improved profitability.
Net income for the fourth quarter was $1.7 million, or $0.10 per diluted share, up from net income of $0.4 million, or $0.02 per diluted share, last year.
During the quarter, the Company announced its intention to divest the highly competitive shuttle bus business. The increasingly competitive environment in the bus industry has led to higher discounting making it more difficult to meet Supreme’s profitability objectives. While shuttle bus products represented less than 13% of the Company’s consolidated 2013 sales, the business generated unacceptable margins in 2013.