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 first quarter ended March 29, 2014. All earnings per share and share figures in this press release have been adjusted for the 5% stock dividend distributed in the second quarter of 2013.
During the first quarter of 2014, the previously disclosed divestiture of the Company’s shuttle bus assets was completed. As a result, the shuttle bus business has been reclassified as a discontinued operation in the Company’s financial statements.
Consolidated net sales from continuing operations in the quarter were $53.4 million, compared with $56.4 million in the first quarter of 2013. The revenue decrease was primarily due to lower sales of specialty vehicles versus the prior year, as well as chassis constraints impacting first-quarter fleet shipments.
Gross margin from continuing operations during the first quarter was 14.8%, compared with 19.7% in last year’s first quarter. The current-year margin contraction was primarily due to unfavorable product mix compared to 2013, which included a higher proportion of lower-margin fleet business and its associated start up inefficiencies, as well as a lower proportion of higher-margin retail and specialty vehicles. Shortages of light-duty chassis from a major supplier constrained shipping volume during the quarter causing higher labor and overhead cost compared to last year, and production efficiencies were also hampered by the extremely inclement weather.
Other income decreased $0.7 million primarily due to a realized gain on the sale of real estate during the first quarter of 2013. Interest expense improved 22% from last year on lower debt balances. Income tax expense from continuing operations was $0.1 million, down from $1.3 million in last year’s first quarter. The effective tax rate from continuing operations in the first quarter of 2014 was 32.4%, compared with 33.2% in 2013’s first quarter.