Supreme Industries Reports First Quarter Results
Supreme Industries Inc., a leading manufacturer of specialized commercial vehicles, including truck bodies, shuttle buses, armored vehicles, homeland response vehicles and luxury motorcoaches, has announced financial results for its first quarter ended March 28, 2009.
First-quarter 2009 net sales were $49.3 million, compared with $75.9 million in the same period of 2008. Supreme’s core dry-freight and bus product sales were off 44% and 26% year-over-year, respectively.
Supreme is a Goshen, Ind.-based assembler of commercial vehicles that partly shares the same supplier base with the RV industry.
The company noted that, due to the effect of the recession and restrictive credit markets, there was a severe and pervasive downturn in commercial vehicle sales during the first quarter. Additionally, in management’s judgment, a number of StarTrans customers delayed bus product purchases in anticipation of finalized Federal mass-transit stimulus funding.
The net loss for the first quarter was $1.4 million, versus net income $200,000, in last year’s comparable quarter.
Robert W. Wilson, Supreme president and COO, said, “In anticipation of the steep decline in business activity, management has been prudently allocating resources to longer-term initiatives while addressing the recessionary market conditions. To date, management has implemented annualized cost reductions of approximately $12.3 million, with a large component of the savings resulting from our 36% headcount reduction.”
He continued: “With the bus backlog now growing, we recently added production of the StarTrans shuttle bus line to our Woodburn, Ore., plant, where we now manufacture curved-wall fiberglass shuttle buses such as Supreme’s Senator and Candidate models. This new bus production capacity enables Supreme to provide enhanced service capabilities west of the Rockies and in western Canada and improves our competitiveness in these markets due to freight-cost savings. With a full line of bus products, our nationwide presence and a strong sales organization, we are strategically well-positioned in this sector.
“Additionally, the Department of State business for armored vehicles has been a bright spot in an otherwise bleak economic environment as net sales for the quarter were $3.3 million.”
Wilson concluded: “Although we have recently seen some signals that indicate easing credit markets and improved economic indicators in some market sectors, we have yet to observe any convincing evidence that a sustained rebound in demand is underway. However, new commercial vehicle registrations in 2008 were at their lowest level since 1994; thus, we believe that there is pent-up demand from an aging fleet of commercial vehicles that will soon need to be replaced.
“When the replacement cycle begins, our expectation is that Supreme’s diversified product line, aggressive cost reductions and solid balance sheet will allow us to benefit from any improvement in demand.”