Supreme Industries, Inc. (NYSE Amex: STS) announced first-quarter consolidated net sales were essentially unchanged at $48.5 million, compared with $48.6 million in the same period a year ago, while gross profit improved to 7.2% from last year's 6.0%, reflecting a higher proportion of specialty products sold and cost reductions.
Selling, general and administrative expenses were flat at $5.6 million year over year, as was interest expense of $0.5 million. For the quarter, operating loss narrowed to $1.9 million from the loss of $2.4 million a year ago.
The company did not record an income tax benefit for the three months ended March 27, 2010, due to having recorded a valuation allowance for the net operating losses incurred in the quarter. This resulted in the reported net loss from continuing operations of $2.4 million, or $0.17 per share, in the first quarter of 2010 versus the loss from continuing operations of $1.2 million, or $0.08 per share, in the comparable quarter in 2009, during which the company recorded a tax benefit of $1.7 million, or $0.12 per share. Supreme noted that, in the fourth quarter of 2009, its Silver Crown luxury motorhome business was terminated and prior-period operating results have been reclassified as discontinued operations.
The sales order backlog at March 27, 2010 was $69.4 million, up slightly from the $68.1 million reported at Dec. 26, 2009. By the end of April 2010, backlog had increased by more than $20 million, reaching $89.7 million and marking the highest level of backlog for the Company since 2006.
Supreme President and Chief Operating Officer Robert W. Wilson commented: 'We improved our gross profit on continued recessionary-level sales volume and we realized a significant increase in order activity in April, particularly in our armored and bus divisions. Additionally, truck dealers began to experience increased customer orders, which led to improved demand for our core product categories. Orders for armored trucks rose 52%, reflecting a $10 million order from the U.S. Department of State and an increase in orders for cash-in-transit vehicles. Backlog for our core truck and bus divisions increased 24% and 11%, respectively, at the end of April 2010 as compared to year-end. The increased backlog reinforces the recent signs of improvement we have been seeing across the industries we serve and we are encouraged by these developments. Additionally, we continue to execute our plan to make operations leaner and have implemented additional cost reductions that will be realized during the remainder of 2010.'
Cash provided by operating activities during the quarter increased to $6.2 million-up from $5.8 million in first-quarter 2009. At March 27, 2010, working capital totaled $20.5 million and the working capital ratio was 1.5 to 1. The company continues to improve its inventory management practices, which resulted in higher inventory turns-an increase of more than 22% quarter over quarter. Total debt was reduced by $6.6 million to $20.7 million and, as a percentage of total assets, improved to 19.5% from 24.9% at the end of 2009. Stockholders' equity was $60.4 million, or $4.24 per share, compared with $62.6 million, or $4.40 per share, at the end of last year.
'We believe Supreme is poised to rebound from the economic downturn as one of the strongest companies in our industry. Investments in market-expanding opportunities and product enhancements, as well as our cost reductions and improvements in asset management, made during the recession should augment the Company's performance in a recovering industry environment. With significant pent-up demand for trucks and recent order activity, management is cautiously optimistic about the prospects for improving sales of our re-designed Signature core truck product,' Wilson concluded.
A live webcast of Supreme Industries' earnings conference call can be heard May 13, at 9 a.m. Eastern Time at http://www.SupremeInd.com. Those unable to participate in the live conference call may access a replay, which will be available on the company's website.