UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
(X) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-8183
SUPREME INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1670945
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
65140 U.S. 33 East, P.O. Box 237
Goshen, Indiana 46526
(Address of principal executive
offices)
Registrant's telephone number, including area code:(219)642-3070
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock ($.10 Par Value) Outstanding at July 26,1995
Class A 5,803,279
Class B 1,658,000
The index to Exhibits is at page 11 in the sequential
numbering system. Total number of pages: 12 .
SUPREME INDUSTRIES, INC.
CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets 3 & 4
Consolidated Statements of Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of 8 & 9
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders 9
Signatures 10
Index to Exhibits 11
Part I. Financial Information
Item 1. Financial Statements
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
1995 1994
Assets
Current assets:
Cash and cash equivalents $104,141 $273,720
Accounts receivable, net 20,704,421 15,733,321
Inventories 20,243,109 19,715,520
Deferred income taxes 1,060,572 1,060,572
Other current assets 355,879 228,161
Total current assets 42,468,122 37,011,294
Property, plant and equipment:
Land and improvements 1,937,030 1,840,393
Buildings and improvements 8,084,556 7,511,881
Leasehold improvements 4,770,256 4,678,091
Machinery and equipment 16,024,098 14,398,281
30,815,940 28,428,646
Less, Accumulated depreciation and
amortization 11,693,273 10,963,180
Property, plant and equipment, net. 19,122,667 17,465,466
Intangible assets, net 2,213,659 2,315,314
Other assets 700,000 800,000
Total assets $64,504,448 $57,592,074
The accompanying notes are a part of the consolidated financial statements.
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets, Concluded
June 30, December 31,
1995 1994
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $3,006,601 $2,947,776
Trade accounts payable 7,258,212 7,401,498
Accrued income taxes payable 1,072,902 812,242
Other accrued liabilities 5,856,268 5,799,353
Total current liabilities 17,193,983 16,960,869
Long-term debt 22,237,621 19,747,322
Deferred income taxes 888,740 888,740
Total liabilities 40,320,344 37,596,931
Stockholders' equity:
Class A Common Stock, $.10 par value 578,814 571,499
Class B Common Stock, convertible into
Class A Common Stock on a one-for-one
basis, $.10 par value 165,800 171,515
Additional paid-in capital 11,014,233 10,953,544
Retained earnings 12,581,743 8,455,071
Treasury stock, at cost, 13,757 shares
of Class A Common Stock (156,486) (156,486)
Total stockholders' equity 24,184,104 19,995,143
Total liabilities and stockholders'
equity $64,504,448 $57,592,074
The accompanying notes are a part of the consolidated financial statements.
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Revenues $48,136,419 $36,321,425 $91,805,802 $68,647,743
Costs and expenses:
Cost of sales 39,365,804 30,004,892 76,771,164 57,561,794
Selling, general and
administrative 3,879,878 3,001,215 7,147,349 5,747,258
Interest 456,332 404,045 939,617 816,192
43,702,014 33,410,152 84,858,130 64,125,244
Income before income
taxes 4,434,405 2,911,273 6,947,672 4,522,499
Income taxes 1,798,000 1,254,000 2,821,000 1,939,000
Net income $2,636,405 $1,657,273 $4,126,672 $2,583,499
Earnings per share:
Primary $.34 $.23 $.54 $.35
Fully diluted $.32 $.21 $.50 $.33
Weighted average number
of shares of common
stock and common stock
equivalents:
Primary 7,780,873 7,346,068 7,679,018 7,402,845
Fully diluted 8,457,818 7,901,854 8,456,052 7,958,631
The accompanying notes are a part of the consolidated financial statements.
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Six Months Ended
June 30,
1995 1994
Cash flows from operating activities:
Net income $4,126,672 $2,583,499
Depreciation and amortization 916,122 719,594
Amortization of intangibles 101,655 101,655
Decrease in other assets 100,000 -----
Gain on sale of equipment (9,250) (29,503)
Changes in operating assets and liabilities (5,452,118) (5,697,713)
Net cash used in operating activitities (216,919) (2,322,468)
Cash flows from investing activities:
Additions to property, plant and equipment (2,573,323) (3,654,675)
Proceeds from sale of property, plant
and equipment 9,250 76,643
Net cash used in investing activities (2,564,073) (3,578,032)
Cash flows from financing activities:
Proceeds from revolving line of credit
and other long-term debt 36,136,666 48,272,400
Repayments of revolving line of credit
and other long-term debt (33,587,542) (43,192,476)
Proceeds from exercise of stock options
and warrants 62,289 302,596
Net cash provided by financing activities 2,611,413 5,382,520
Decrease in cash and cash equivalents (169,579) (517,980)
Cash and cash equivalents, beginning
of period 273,720 642,339
Cash and cash equivalents, end of period $104,141 $124,359
The accompanying notes are a part of the consolidated financial statements.
SUPREME INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to Form
10-Q and therefore do not include all of the information and
financial statement disclosures necessary for a fair
presentation of consolidated financial position, results of
operations and cash flows in conformity with generally accepted
accounting principles. In the opinion of management, the
information furnished herein includes all adjustments necessary
to reflect a fair statement of the interim periods reported.
All adjustments are of a normal and recurring nature. The
December 31, 1994 consolidated balance sheet data was derived
from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
NOTE B - INVENTORIES
Inventories which are stated at the lower of cost or market with
cost determined on the first-in-first-out method, consist of the
following:
June 30, December 31,
1995 1994
Raw materials $ 11,840,224 $11,718,902
Work-in-progress 2,756,858 2,716,238
Finished goods 5,646,027 5,280,380
$ 20,243,109 $19,715,520
The valuation of raw materials, work-in-progress and finished
goods inventories at interim dates is based upon a gross profit
percentage method and bills of materials. Since 1989 the
Company has had favorable adjustments in the fourth quarter
resulting from the annual physical inventories. The Company is
continuing to refine its costing procedures for valuation of
interim inventories in an effort to minimize the annual book to
physical inventory adjustments.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Revenues for the six months ended June 30, 1995 increased
$23,158,059 to $91,805,802 while revenues for the three months
ended June 30, 1995 increased $11,814,994 to $48,136,419. Net
income for the six months ended June 30, 1995 increased
$1,543,173 to $4,126,672 while net income for the three months
ended June 30, 1995 increased $979,132 to $2,636,405.
The increase in revenues can be attributed to strong demand for
the Company's diversified product lines in all market areas as
well as an increase in fleet orders over the comparable prior year
period. The acquisition of Murphy Body Company in August
1994 provided the Company with expanded refrigerated product
lines, however, these new product lines were a very small percentage of
the revenue growth. The principle benefit to date of the Murphy
acquisition has been the additional capacity provided for the
Company's existing refrigerated product lines.
The increase in net income for the three months and six months
ended June 30, 1995 can be directly attributed to the
significant increase in revenues for the periods. The gross
profit percentage changed very little from the prior year
periods. Increases in the Company's basic raw material costs
were offset by improved direct labor efficiency and lower
overhead cost as a percentage of total revenues caused by the
fixed nature of certain components of the overhead structure.
Liquidity and Capital Resources
Funds available under the Company's revolving credit agreement
were sufficient to finance operations for the six months ended
June 30, 1995, finance capital expenditures and service debt
obligations. Availability under the Company's revolving credit
agreement was $1.7 million at June 30, 1995.
The ratio of current assets to current liabilities was 2.5 to 1
at June 30, 1995 compared to 2.2 to 1 at December 30, 1994.
Capital expenditures in the period were $2,573,323 for the six
months ended June 30, 1995. Major expenditures during the
period were for the construction of the Company's patented
Fiberglass Reinforced Plywood (FRP) machine and the building to
house it. The Company also purchased property in Rhode Island
for its sales/distribution facility servicing the New England
area. These expenditures were funded with borrowings under the
Company's revolving credit agreement.
For the six months ended June 30, 1995 operating activities used
$.2 million of cash compared to last years period ended June 30,
1994 when operating activities used $2.3 million of cash. The
usage of cash in the 1995 period resulted from significantly
higher levels of accounts receivable due to the strong growth in
revenues. This usage was offset by cash provided as a result of
the strong growth in earnings. The net usage of cash in the 1994
period resulted from a substantial growth in accounts receivable
in that period, as well as the reduction in accounts payable as
the Company availed itself of discounts.
The Company believes cash flow from operations and funds
available from outside financing sources will be sufficient to
finance the balance of 1995 operations and planned capital
expenditures.
Part II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
Supreme Industries, Inc.'s annual meeting was held on June 22,
1995. Below is a summary of matters voted upon at that meeting.
a) The following individuals were elected Directors by the
holders of the Company's Class A Common Stock by a vote of
4,545,802 to 7,994 with no abstentions:
H. Douglas Schrock
Rice M. Tilley
Rick L. Horn
The following individuals were elected Directors by the holders
of the Company's Class B Common Stock by a vote of 1,621,848 to
0 with no abstentions:
William J. Barrett
Robert J. Campbell
Thomas Cantwell
Herbert M. Gardner
Omer G. Kropf
Robert W. Wilson
b) Coopers & Lybrand L.L.P. was ratified as the Company's independent
auditors by a vote of 6,156,679 to 11,564 with 7,401 abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits:
Exhibit 11-Statement Regarding Computation of
Per Share Earnings
b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SUPREME INDUSTRIES, INC.
DATE: _____________ BY: /S/ROBERT W. WILSON
Executive Vice President, Treasurer,
Chief Financial Officer and Director
(Principal Financial and Accounting
Officer)
(Signing on behalf of the Registrant
and as Principal Financial Officer)
INDEX TO EXHIBITS
Exhibit No. Description Page
11 Statement Regarding Computation of
Per Share Earnings 12
EXHIBIT 11 STATEMENT REGARDING COMPUTATION OF PER SHARE
EARNINGS
SUPREME INDUSTRIES, INC. AND SUBSIDIARIES
(Amount in thousands, except per share data)
Six Months Ended June 30,
1995 1994
PRIMARY
Average shares outstanding 7,417 7,213
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using average market
price 262 190
TOTAL 7,679 7,403
Net income $4,127 $2,583
Net income per share $ .54 $ .35
FULLY DILUTED
Average shares outstanding 7,417 7,213
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using the period-end market
price, if higher than the average market
price 483 190
Net effect of subordinated convertible
notes 556 556
TOTAL 8,456 7,959
Net income $4,127 $2,583
Interest expense reduction due to
assumed conversion of subordinated
convertible notes - net of tax 67 65
Net income as adjusted $4,194 $2,648
Net income per share $ .50 $ 0.33