Supreme Industries, Inc. (NYSE MKT: STS) reported that net income was up 78.7% in the third quarter, increasing to $5 million, compared to net income of $2.8 million in the same quarter of 2015.
Consolidated net sales grew 15.4% to $74.8 million, compared with $64.8 million in last year's third quarter. Higher sales volume in the quarter improved capacity utilization, enhancing margins in addition to a favorable mix. Gross margin expanded to 23% of sales, compared with 19.5% of sales in the same quarter of 2015. Operating income improved 95.5% in the quarter, reaching $7.9 million, versus $4.1 million in last year's third quarter.
"Higher sales of dry freight vans, insulated bodies and Spartan service bodies helped achieve meaningful year-over-year sales growth in the third quarter of this year," said Mark Weber, President and Chief Executive Officer.
Consolidated net sales increased 12.5% in the year-to-date period, reaching $237.1 million, and up from $210.7 million during the first nine months of 2015. The sales growth for the nine-month period was the result of core market expansion in the first half of the year and continued growth in target account medium duty sales.
As a percentage of net sales, gross margin expanded from 18.8% last year to 23.1% in the 2016 nine-month period. Operating income increased 93.0% to $26.2 million in 2016, compared with $13.6 million last year. Net income was $17.1 million, or $0.99 per diluted share in the nine-months, which was up from $9.1 million, or $0.53 per diluted share, in last year's comparable period.
At the end of the third quarter of 2016, order backlog was $58.1 million, which was down from the $74.4 million in order backlog at the end of last year's same quarter. The timing of several large orders increased the backlog at the end of the third quarter 2015.
"During the first nine months of 2016, we increased sales with support from customers who value our customer-centric approach to optimized solutions, product durability and best-in-class lead times," Weber added, "However, industry-wide growth in commercial truck sales decelerated during the summer months, suggesting moderate order activity through year end."