Supreme Industries, Inc. (NYSE MKT: STS) announced that consolidated net sales from continuing operations increased to $58 million in the third quarter, compared with $56.7 million for the same period last year—an increase of 2.2%.
Net income per diluted share improved to $0.15 in the third quarter of 2014, versus $0.09 last year, which included a $1.0 million after-tax loss related to its discontinued shuttle bus operations.
"Medium-duty sales are showing continued strength, which is in line with related industry reports," said Mark Weber, President and Chief Executive Officer. "These customers are generally optimistic concerning their respective market conditions and anticipate continued growth well into 2015."
Gross profit from continuing operations in the quarter was $11.3 million, or 19.5% of sales, compared with $11.6 million, or 20.5% of sales, in the prior-year quarter. The decrease of $0.3 million is primarily due to product and customer mix.
Operating income from continuing operations was $3.8 million, compared with $4.0 million in last year's third quarter. Income tax expense was unchanged year-over-year at $1.2 million. Net income from continuing operations was $2.5 million, essentially unchanged from the same quarter a year ago. On a continuing operations basis, third quarter net income per diluted share was $0.15 in both years.
Consolidated net sales from continuing operations in the nine-month period increased to $183.0 million, up from $181.9 million last year.
Gross margin for the nine-months was 18.5% of sales, compared with 20.5% in the prior year. The lower margin reflects a chassis shortage and severe weather impact in the first quarter of 2014, and a higher mix of sales to fleet customers compared with last year. Correspondingly, gross profit declined to $33.8 million, compared with $37.2 million in last year's comparable nine-month period.
Operating income was $10.6 million, compared with $14.4 million in 2013, and income from continuing operations was $6.9 million for the nine-months of 2014, down from $9.1 million last year.
The company's discontinued shuttle bus operations generated a $1.6 million after-tax net loss during the current year nine-month period, compared with a loss of $4.3 million last year. Including the negative impact on 2013's results from discontinued operations, reported net income improved to $5.4 million, or $0.32 per diluted share, up from reported net income of $4.8 million, or $0.29 per diluted share, in last year's comparable period.
"Throughout the first three quarters of 2014, we have made steady progress towards our strategic goals. We have actively addressed under-performing business units, invested capital to target growth and efficiency, and elevated customer focus across the organization. These initiatives have improved our financial performance allowing us to reinstate a cash dividend to shareholders for the first time since 2008," Weber said. "In addition, our new and innovative products employing our proprietary FiberPanel HC sidewalls are generating interest in the market. This recently translated into securing orders for trucks built with these new body panels. These internal efforts, combined with steady market demand, give us optimism as we close out 2014 and look ahead to next year."
Sales order backlog at the end of the quarter was $50.8 million, compared with $68.7 million at the end of the third quarter 2013. A major fleet customer ordered in the fall of 2013, elevating the backlog, but returned to their normal ordering pattern in the spring of 2014.