Supreme Industries, Inc. (NYSE MKT: STS) reported third-quarter gross profit of $12.6 million, up 11.3% from $11.3 million in 2014, on higher sales.
Consolidated net sales in the third quarter grew to $64.8 million, compared with $58 million in last year's third quarter, an increase of 11.7%. Higher sales of dry freight and insulated vehicles, compared with last year, accounted for the increase in consolidated sales.
As a percentage of net sales, third quarter gross margin of 19.5% remained unchanged from a year ago. Material cost was favorably impacted by decreased commodity prices including steel and aluminum, while overhead costs were elevated due to higher group health insurance claims. Income from continuing operations before taxes increased 11.6%, to $4.1 million in the third quarter of this year, versus $3.7 million in last year's third quarter.
Net income grew 13.3%, reaching $2.8 million in the third quarter, up from $2.5 million in last year's third quarter. Net earnings per diluted share increased to $0.16 per share, up from $0.15 per share in last year's comparable quarter.
"Strong new order rates allowed us to post double-digit growth in shipments, income and our quarter ending backlog," said Mark Weber, President and Chief Executive Officer. "We are well positioned as we enter the last quarter of the year."
Consolidated net sales from continuing operations increased 15.2% in the year-to-date period, reaching $210.7 million, up from $183 million in the first nine months of 2014. Higher net sales in the first nine months of 2015 were the result of increased retail and fleet truck sales, which more than offset a sales decline of trolleys and specialty vehicles.
Gross profit for the nine months improved to $39.6 million from $33.8 million over the 2014 nine months, an increase of 17.0%. As a percentage of net sales, gross margin expanded from 18.5% last year to 18.8% in the 2015 nine-month period. The favorable absorption from the higher sales volume was partially offset by product mix as the company shipped a higher proportion of fleet products, which carry a lower gross margin. Severe weather and a shortage of available chassis also negatively impacted last year's results. Income from continuing operations before taxes increased 29.1% in 2015, up to $13.4 million compared with $10.4 million last year.
The company's discontinued shuttle bus business was sold in the first quarter of 2014 and generated a $1.6 million after-tax net loss in that period. Including the impact from discontinued operations on last year's results, net income improved to $9.1 million, or $0.53 per diluted share, for the nine-month period, compared with net income of $5.4 million, or $0.32 per diluted share last year. Excluding the impact from discontinued operations, net income improved to $9.1 million, or $0.53 per diluted share, in the nine-months, up from $6.9 million, or $0.41 per diluted share, in the same period last year.
"The combined performance of our sales and operations teams resulted in strong third quarter orders for trucks and specialty vehicles. It is very encouraging to realize notable year-over-year growth in our backlog," Weber added.
Due to the increased sales volume, working capital increased to $52.4 million at September 26, 2015, compared with $44.4 million at December 27, 2014. The Company ended the quarter with $8.7 million in cash and cash equivalents, and $8.5 million in total debt. Stockholders' equity increased to $89.5 million at September 26, 2015, compared with $81.0 million at December 27, 2014, increasing tangible book value per share to $5.38 at quarter end, compared with $4.94 at the end of last year.