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 March 31, 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 May 4, 1994
Class A 5,791,277
Class B 1,642,882
The index to Exhibits is at page 10 in the sequential numbering
system. Total pages:11
SUPREME INDUSTRIES, INC.
CONTENTS
Part I. Financial Information Pages
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets 3 & 4
Consolidated Condensed Statements of Income 5
Consolidated Condensed Statements of Cash Flows 6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 & 8
Part II. Other Information 9
Signatures 9
Index to Exhibits 10
Part I. Financial Information
Item 1. Financial Statements
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, December 31,
1995 1994
Assets
Current assets:
Cash and cash equivalents $92,048 $273,720
Accounts receivable, net 21,771,839 15,733,321
Inventories 23,731,948 19,715,520
Deferred income taxes 1,060,572 1,060,572
Other current assets 369,930 228,161
Total current assets 47,026,337 37,011,294
Property, plant and equipment:
Land and improvements 1,878,376 1,840,393
Buildings and improvements 7,733,623 7,511,881
Leasehold improvements 4,723,829 4,678,091
Machinery and equipment 15,165,743 14,398,281
29,501,571 28,428,646
Less, Accumulated depreciation and
amortization 11,256,857 10,963,180
Property, plant and equipment, net 18,244,714 17,465,466
Intangible assets, net 2,264,487 2,315,314
Other assets 800,000 800,000
Total assets $68,335,538 $57,592,074
The accompanying notes are a part of the consolidated financial statements.
Supreme Industries, Inc. and Subsidiaries
Consolidated Balance Sheets, Concluded
March 31, December 31,
1995 1994
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $2,978,831 $2,947,776
Trade accounts payable 9,655,414 7,401,498
Accrued income taxes payable 1,679,902 812,242
Other accrued liabilities 5,274,747 5,799,353
Total current liabilities 19,588,894 16,960,869
Long-term debt 26,372,494 19,747,322
Deferred income taxes 888,740 888,740
Total liabilities 46,850,128 37,596,931
Stockholders' equity:
Class A Common Stock, $.10 par value 577,213 571,499
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 10,953,545 10,953,544
Retained earnings 9,945,338 8,455,071
Treasury stock, at cost, 13,757 shares
of Class A Common Stock (156,486) (156,486)
Total Stockholders' equity 21,485,410 19,995,143
Total liabilities and stockholders' equity $68,335,538 $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
March 31,
1995 1994
Revenues $43,669,383 $32,326,318
Costs and expenses:
Cost of sales 37,405,360 27,556,902
Selling, general and administrative 3,267,471 2,746,043
Interest 483,285 412,147
41,156,116 30,715,092
Income before income taxes 2,513,267 1,611,226
Income taxes 1,023,000 685,000
Net income $1,490,267 $926,226
Earnings per share:
Primary $0.20 $0.12
Fully diluted $0.19 $0.12
Weighted average number of shares of
common stock and common stock equivalents:
Primary 7,468,625 7,474,056
Fully diluted 8,081,621 8,029,842
The accompanying notes are a part of the consolidated financial statements.
Supreme Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
1995 1994
Cash flows from operating activities:
Net income $1,490,267 $926,226
Depreciation and amortization 431,176 372,294
Amortization of intangibles 50,827 50,828
Gain on sale of equipment (2,894) (29,503)
Changes in operating assets and liabilities (7,599,745) (941,838)
Net cash provided by (used in)
operating activities (5,630,369) 378,007
Cash flows from investing activities:
Additions to property, plant and equipment (1,210,424) (1,349,046)
Proceeds from sale of property, plant
and equipment 2,894 76,643
Net cash used in investing activities (1,207,530) (1,272,403)
Cash flows from financing activities:
Proceeds from revolving line of credit
and other long-term debt 20,400,531 33,868,036
Repayments of revolving line of credit
and other long-term debt (13,744,304) (31,274,817)
Proceeds from exercise of stock options
and warrants --- 621
Net cash provided by financing activities 6,656,227 2,593,840
Increase (decrease) in cash and
cash equivalents (181,672) 1,699,444
Cash and cash equivalents, beginning
of period 273,720 642,339
Cash and cash equivalents, end of period $92,048 $2,341,783
The accompanying notes are a part of the consolidated financial statements.
SUPREME INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A -BASIS OF PRESENTATION AND OPINION OF MANAGEMENT
The accompanying unaudited consolidated condensed 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. The December 31, 1994 condensed 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:
March 31, December 31,
1995 1994
Raw materials $14,864,026 $11,718,902
Work-in-progress 2,716,238 2,716,238
Finished goods 6,151,684 5,280,380
$23,731,948 $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 quarter ended March 31, 1995 increased
$11,343,065 to $43,669,383 from $32,326,318 for the quarter
ended March 31, 1994. Net income for the quarter ended March
31, 1995 increased $564,041 to $1,490,267 from $926,226 for the
quarter ended March 31, 1994.
The significant increase in revenues can be attributed to
continued strong demand for the Company's broad product line at
all six manufacturing facilities. While first quarter revenues
are benefiting from two price increases implemented in 1994, the
majority of the revenue growth can be attributed to increased
volume as well as a change in product mix to units with higher
individual selling prices.
The Company's cost of sales as a percentage of revenue increased
slightly for the quarter ended March 31, 1995 when compared to
the prior year comparable quarter. The Company experienced
significant increases in the cost of aluminum, steel, wood and
fiberglass during the last half of 1994 that were not completely
offset by the price increases implemented during 1994. The
Company's overhead and direct labor expenses improved as a
percentage of revenues. The fixed expenses in the Company's
overhead pool were responsible for the improvement in the
overhead percentage while a change in product mix and
productivity improvements were responsible for the improvement
in direct labor as a percentage of total revenues.
The improvement in net income as a percentage of revenues can be
primarily attributed to declines in selling, general and
administrative expense and interest expenses as a percentage of
revenues. The fixed nature of certain items in selling, general
and administrative expenses were responsible for the improvement
in this category. The improvement in interest expense as a
percentage of revenues, even though interest dollars and
borrowings were up, can be attributed to more favorable interest
rates on the Company's new "Credit Agreement" entered into on
April 25, 1994.
Liquidity and Capital Resources
Funds available under the Company's revolving credit agreement
were sufficient to finance the first quarter 1995 operations,
finance capital expenditures and service debt obligations. The
Company is currently using its complete availability under the
$12,000,000 revolving credit agreement to finance higher
receivables and inventories associated with major contracts
to be completed and delivered principally in the first six
months of the year. The Company anticipates an improvement
in credit availability as these contracts are delivered.
The ratio of current assets to current liabilities was 2.4 to 1
at March 31, 1995 compared to 2.2 to 1 at December 31, 1994.
Capital expenditures were $1,210,424 for the quarter ended March
31, 1995. These expenditures were funded with borrowings under
the Company's revolving credit agreement. Historically the
Company experiences negative cash flow from operating activities
in the first quarter correlating with the significant increases
in accounts receivable and inventory requirements associated
with major contracts to be delivered in the first six months of
the year.
The Company anticipates that cash flow from operations and funds
available from outside financing will be sufficient to finance
the balance of 1995 operations and planned capital expenditures.
PART II. OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
11 - Statements Regarding Earnings Per Share
27 - Financial Data Schedule
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: May 9, 1995 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 Computation of Earnings Per Share 11
27 Financial Data Schedule 12
EXHIBIT 11-- STATEMENT RE: COMPUTATION OF PER SHARE
EARNINGS (LOSS)
SUPREME INDUSTRIES, INC.
(Amount in thousands, except per share data)
Three Months Ended March 31,
1995 1994
PRIMARY
Average shares outstanding 7,417 7,227
Net effect of dilutive stock options
and warrants - based on the treasury
stock method using average market
price 52 247
TOTAL 7,469 7,474
Net income $1,490 $ 926
Net income per share $ .20 $ .12
FULLY DILUTED
Average shares outstanding 7,417 7,227
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 109 247
Net effect of subordinated convertible
notes 556 556
TOTAL 8,082 8,030
Net income $1,490 $ 926
Interest expense reduction due to
assumed conversion of subordinated
convertible notes - net of tax 34 32
Net income as adjusted $1,524 $ 958
Net income per share $ 0.19 $ 0.12