Aftermarket

3Q Sales Climb 26% at Supreme; Backlog Up 44%

November 04, 2010

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Supreme Industries Inc., a manufacturer of specialized commercial vehicles, said its net sales for 2010's third quarter rose 26 percent
to $62.8 million from $49.8 million in last year's comparable period.

For the first nine months ending September 25, net sales reached $171.9 million, up 18% from $146.0 million in 2009.

Supreme reported improved demand for all major product lines including truck, bus and armored vehicles. Sales order backlog at Sept. 25, 2010, grew 44 percent to $89 million from $62 million a year ago.

Compared with last year's third quarter, sales in Supreme's core dry-freight truck and armored vehicle divisions advanced 33 percent and 109 percent, respectively. The company's bus division posted a 4 percent sales increase versus the prior-year period.

Net sales also improved in each of Supreme's primary product lines during the first nine months of 2010, with dry-freight trucks, buses and armored vehicles reporting gains of 18 percent, 16 percent and 31 percent, respectively.

The third-quarter loss from continuing operations was $0.1 million, or $0.01 per share, compared with the $1.3 million loss, or $0.09 per share, reported for the year-ago quarter. Year to date, the company's net loss from continuing operations was $2.6 million, or $0.18 per share, compared with the net loss of $3.4 million, or $0.23 per share, in that period last year.

"As anticipated, we experienced firmer demand across all of our major product categories," said Robert W. Wilson, president and CEO. "Order activity continued to ramp up compared with last year as evidenced by our higher backlog and increased activity from fleet customers.

"We already have a large fleet order on the books for spring 2011. However, we will continue to maintain a conservative and cautious view of our markets as we move forward."

Third-quarter gross profit increased 39 percent to $5.7 million from $4.1 million last year. Gross profit margin as a percentage of net sales improved to 9.1 percent for the 2010 third quarter and 8.8 percent for the nine months, compared with 8.2 percent in the third quarter and 7.4 percent in the first nine months of 2009.

The year-over-year gross margin increases for both periods were primarily the result of higher unit volumes and benefits from implemented cost reductions, the company said.

"We previously indicated that historically low order rates from fleet operators over the past few years have resulted in pent-up demand," Wilson said. "We are starting to see fleet operators return to the market and recently have been bidding on and winning some large fleet awards. We are hopeful that this trend for our core dry-freight truck business will continue into 2011."


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