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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended
December 31, 1996.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition
period from to .
Commission File No. 1-8183
SUPREME INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 75-1670945
(State of Incorporation) (IRS Employer Identification No.)
P.O. Box 237, 65140 U.S. 33 East, Goshen, Indiana 46526
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) - (219)642-3070
Securities registered pursuant to Section 12(b) of the Act:
Class A Common Stock ($.10 Par Value) American Stock Exchange
(Title of each class) (Name of Each Exchange on Which Registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in the definitive proxy or
information statements incorporated by reference in Part III of the
Form 10-K or any amendment hereto. X
The aggregate market value of the voting stock held by non-affiliates of
the registrant at February 28, 1997: $38,049,949
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at February 28, 1997
Class A Common Stock ($.10 Par Value) 7,980,535 shares
Class B Common Stock ($.10 Par Value) 1,402,975 shares
Documents Incorporated by Reference
Parts of Form 10-K Into Which the
Document Document is Incorporated
Portions of the Proxy Statement
for Annual Meeting of Shareholders
to be held on April 29, 1997 Part III
The Index to Exhibits is on page in the sequential numbering system.
Total pages
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PART I
ITEM 1. BUSINESS.
History
Supreme Industries, Inc., a Delaware corporation, formerly ESI
Industries, Inc. (the "Company"), is one of the nation's leading
manufacturers of specialized truck bodies and shuttle buses. The Company
was incorporated in 1979, and was initially engaged in the geophysical
services business together with its former wholly-owned subsidiary, TGC
Industries, Inc. ("TGC").
In January 1984, Supreme Corporation ("Supreme") was formed as a
wholly-owned subsidiary of the Company to acquire a company which was
engaged in the business of manufacturing, selling, and repairing specialized
truck bodies, shuttle buses and related equipment. In June 1986, the Boards
of Directors of the Company and TGC approved a spin-off of TGC to the
stockholders of the Company. The spin-off was effective for financial and
accounting purposes as of July 31, 1986.
In December 1986, the Company, through a newly formed, wholly-owned
subsidiary, Contempri Homes, Inc. ("Contempri"), purchased all of the assets
and assumed substantially all of the liabilities of Contempri Homes, Inc., a
Pennsylvania corporation engaged in the business of producing modular homes.
In July 1987, Supreme's newly formed, wholly-owned subsidiary, Supreme
Mid-Atlantic Corporation, formerly Supreme-Jannell Corporation, purchased
the operations and certain assets and assumed certain liabilities of
Jannell & Son Body Co., a Rhode Island corporation engaged in both truck body
manufacturing and sales and truck body repair and truck equipment sales at
facilities in Rhode Island.
In March 1990, Supreme Corporation purchased land and a manufacturing
facility in Jonestown, Pennsylvania, for the purpose of manufacturing truck
bodies and selling them in the Mid-Atlantic and Northeastern states. This
facility produces bodies that had previously been manufactured in leased
facilities located in Woonsocket, Rhode Island.
In December 1992, the Boards of Directors of the Company and Contempri
approved a spin-off of Contempri to the stockholders of the Company. The
spin-off was effective for financial and accounting purposes as of
December 31, 1992. Subsequent to the spin-off, the Company has been
operating in one line of business as a manufacturer of specialized truck
bodies and shuttle buses through its operating subsidiary, Supreme
Corporation.
In August 1994, the Company acquired the business operations and
substantially all of the operating assets of Murphy Body Company, Inc.,
Wilson, North Carolina. The acquisition provided additional refrigerated
product lines that the Company did not currently produce and added
additional capacity for the Company's existing product lines. The
acquisition also provided better market penetration for all of the Company's
product lines into Virginia and North and South Carolina.
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On March 5, 1996, the Company acquired the business operations and
assets of S.D. Enterprises, Inc., a paratransit van manufacturer. The
acquisition of the Freedom One (trademark) product line complements Supreme's
existing line of bus products and provides access to the handicapped van
conversion market. The Freedom One product line meets all Americans with
Disabilities Act (ADA) standards.
Financial Information About Industry Segments
The Company operates in one industry segment, Specialized Truck Body
Manufacturing.
General Description of the Company's Business
The specialized truck body industry consists of companies that
manufacture and/or distribute specialized truck bodies and install them and
other equipment on truck chassis. The truck chassis, each of which consists
of an engine, frame with wheels, and in some cases a cab, are manufactured
by third parties who are typically major automotive or truck companies.
Such companies typically do not build specialized truck bodies. See
"Competition."
Supreme's products are medium-priced with prices generally ranging from
$1,000 to $45,000. Supreme's truck bodies and custom trailers are offered in
aluminum or fiberglass reinforced plywood panel ("FRP") construction and are
available in lengths of 9 to 45 feet and heights up to 13 feet, 6 inches.
Examples of optional equipment offered by Supreme include lift gates,
cargo-handling equipment, customized doors, special bumpers, ladder racks,
and refrigeration equipment, which are configured with truck bodies to meet
the end-user's needs. Supreme also makes its own fiberglass wind deflectors
under the name of Fuel Shark, which reduce wind resistance and improve fuel
efficiency. Supreme is not in the business of manufacturing recreational
vehicles or long-distance aluminum truck-trailers. The following is a brief
summary of Supreme's products:
Van bodies. Supreme's van bodies are typically fabricated up
to 28 feet in length with prepainted aluminum or FRP panels,
aerodynamic front and side corners, hardwood floors and various
door configurations to accommodate end-user loading and
unloading requirements. This product is used for diversified
dry freight transportation.
Refrigerated Chiller (trademark) insulated van bodies.
Chiller (trademark) vans are insulated FRP bodies
which can accommodate controlled temperature and
refrigeration needs of end-users. All fiberglass
exterior laminated walls are corrosion resistant and
utilize foam insulation which permits varying levels of
temperature to as low as minus twenty degrees Fahrenheit.
Kold King (trademark) aluminum insulated van bodies.
Supreme's advances in insulated foam technology have created
this aluminum insulated body with greater strength, less
weight and better thermal efficiency.
Nordica (trademark) fiberglass refrigerated truck bodies.
Nordica (trademark) bodies allow the customer to use a smaller
refrigerated unit. The bodies incorporate seamless
gel-coated fiberglass walls and fiberglass pultrusion to
create a lightweight body that is strong and durable.
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Iner-City (trademark) cutaway van bodies. Aluminum or FRP
cutaway van bodies are installed only on cutaway chassis
which are available with or without access to the cargo
area from the cab. The Iner-City (trademark) cutaway van
body is similar to the regular van body except for floor
construction and shorter lengths (10 feet to 15 feet) as
compared with van bodies which are constructed to lengths
of up to 28 feet.
Iner-City (trademark) walk-in van bodies. Supreme
manufactures its walk-in vans on a rail truck chassis
having no cab. Supreme fabricates the driver's
compartment and body using FRP panels and aluminum.
Some uses for this product include the distribution of
food products and small packages.
Commander (trademark) fiberglass van bodies. The
Commander (trademark) is a one-piece fiberglass molded
body used principally in the lawn care industry. The
corrosion resistant body has an interior design which
helps control chemical spills or damage from corrosion
and enhances the clean-up process.
Pro Fleet commercial conversions. Supreme's Pro Fleet
product line meets the needs of a wide array of
commercial users. Pro Fleet customizes Chrysler, Ford,
and General Motors full-size vans, minivans and a full
line of trucks. These products are used as mobile
offices, mobile workstations, commuter and executive
vans as well as service and delivery vehicles.
Spartan mini-bodies. Spartan mini-bodies are produced in
three different configurations and designed to be mounted
on small trucks for diversified commercial use.
StarTrans (trademark) shuttle buses. The StarTrans (trademark)
shuttle buses have seating capacities for 12 to 29 people
and are offered with a variety of seating arrangements and
with such options as wheelchair lifts, custom interiors, and
special exterior paint schemes. The shuttle bus line features
an improved aerodynamic exterior design and is intended for use
by hotels, nursing homes, car leasing companies, and
airport-related users.
StarTrans (trademark) mid-size buses. Supreme's
StarTrans (trademark) mid-size buses are offered in lengths
of up to 31 feet with capacities of up to 35 passengers.
This product serves the public transit and tour markets and
provides the Company's dealer network with a more
comprehensive product line.
Freedom One (trademark) paratransit vans. Supreme's
Freedom One (trademark) paratransit handicapped van
conversion product line provides full access to the
handicapped van market. The Company converts Chrysler, Ford
and General Motors minivans to meet all Americans with
Disabilities Act (ADA) standards. The vans are marketed
through automotive and mobility dealers as well as through
the Company's StarTrans (trademark) bus distribution network.
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Customized trailers. Supreme manufactures a variety of
customized trailers for special needs, including mobile
laboratories, antique and race car haulers, and trailers
for the broadcasting industry.
Stake bodies. Stake bodies are flatbeds with various
configurations of removable sides. The stake body is utilized
for intercity distribution of products, as well as for a broad
range of agricultural transportation needs.
Chiller (trademark), Kold King (trademark), Nordica (trademark),
Iner-City (trademark), Commander (trademark), Spartan,
StarTrans (trademark), Freedom One (trademark), and Fuel Shark
are trademarks used by Supreme in its marketing of truck bodies
and buses. Chiller (trademark), Kold King (trademark),
Nordica (trademark), Iner-City (trademark), Commander (trademark),
StarTrans (trademark) and Freedom One (trademark) are trademarks
registered in the U.S. Patent and Trademark Office.
Some examples of specialized truck bodies that are not manufactured by
Supreme are dump bodies, utility bodies and garbage packers. Neither
Supreme nor any of its competitors manufacture every type of specialized
truck body. Supreme intends to continue to expand its product line, but
there is no assurance that it will do so.
Manufacturing
Supreme's manufacturing facilities are located in Goshen, Indiana;
Griffin, Georgia; Cleburne, Texas; Moreno Valley, California; Jonestown,
Pennsylvania and Wilson, North Carolina. Supreme's management estimates
that on the average, Supreme's plants and equipment are being used at
approximately 50%-90% of capacity on a one-shift basis.
Supreme builds specialized truck bodies and installs other equipment on
truck chassis, most of which are provided by bailment pool arrangements or
are owned by dealers or end-users. These truck bodies are built on an
assembly line from engineered structural components, such as floors, roofs,
and wall panels. These components are manufactured from Supreme's
proprietary designs and are installed on the truck chassis. Supreme then
installs optional equipment and applies any special finishes that the
customer has specified. At each step of the manufacturing and installation
process, Supreme conducts quality control procedures to insure that the
products meet its customers' specifications. Supreme's products are
generally produced to firm orders and are designed and engineered by Supreme.
Order levels will vary depending upon price, competition, prevailing
economic conditions and other factors.
Supreme has designed and built its own fabricating equipment for many of
its manufacturing processes. Supreme has its own fiberglass manufacturing
facilities that process and assemble the Fiberglass Reinforced Panel ("FRP")
and other fiberglass products as required. The Company's patented FRP
manufacturing facility is currently producing panels on a limited basis for
internal use with production runs scheduled to start in late March 1997.
The facility has sufficient capacity to supply the Company's internal
requirements. Once internal requirements are met, the Company plans to
market FRP panels to other users.
The Company's hardwood flooring manufacturing facility began producing
and shipping product in the fourth quarter of 1996. The facility has
capacity to supply all of the Company's internal needs. To avoid being
dependent on one source for such a critical raw material component, the
Company will continue to purchase a portion of its requirements from outside
sources. Excess capacity from the Honduran facility will be marketed to
other users of hardwood flooring.
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Supreme provides limited warranties against construction defects in its
products. These warranties generally provide for the replacement or repair
of defective parts or workmanship for five years following the date of
retail sale.
Supreme does not purchase truck chassis for inventory. Supreme accepts
shipment of truck chassis owned by dealers or end-users, for the purpose of
installing and/or manufacturing its specialized truck bodies on such chassis.
In the event of a labor disruption or other uncontrollable event adversely
affecting the limited number of companies which manufacture and/or deliver
such truck chassis, Supreme's level of manufacturing could be substantially
reduced. Approximately 20% of the chassis involved in Supreme's
manufacturing have been secured through bailment or consignment agreements
with three major chassis manufacturers that provide for truck chassis pools
at each of Supreme's manufacturing facilities.
Raw Materials
Supreme does not have any long-term raw material contracts and is
dependent upon suppliers of lumber, fiberglass, aluminum and steel for its
manufacturing. However, there are several readily available sources for
these raw materials. In addition, as discussed above, Supreme has
established a captive hardwood flooring manufacturing facility in Honduras
to provide a dependable source of supply at favorable costs. From time to
time, Supreme's operations may be affected by labor disruptions experienced
by its raw material suppliers.
Marketing
Supreme normally sells the truck body and/or equipment that has been
installed on the truck chassis to either truck equipment distributors, truck
dealers or directly to end-users. Truck bodies purchased by a truck dealer
from Supreme are sold by the dealer to its own customers. Since Supreme or
its distributors (and not the truck dealers) generally service all Supreme
products sold by the truck dealers, each truck dealer is normally located
within relatively close geographic proximity to Supreme or the distributor
supplying such dealer.
Supreme's distributor/dealer network consists of approximately 40 bus
distributors, 85 truck equipment distributors and 500 truck dealers.
Management believes that this large distributor/dealer network, coupled with
Supreme's geographically-dispersed plant sites, gives Supreme a distinct
marketing advantage over its competitors. Supreme generally delivers its
products within 3 to 6 weeks after the receipt of orders.
Approximately 60 employees are engaged in direct sales. Supreme engages
in direct advertising in trade publications, trade shows and cooperative
advertising campaigns with distributors.
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Competition
Specialized truck bodies are produced by many companies, most of which
compete on a regional basis. Management believes that Supreme enjoys a
competitive advantage based upon its established distributor/dealer network
and six production facilities and seven distribution centers. Truck chassis
manufacturers have not generally shown an interest in manufacturing truck
bodies because such manufacturers' highly-automated assembly line operations
do not lend themselves to the efficient production of a wide variety of
highly specialized and different truck bodies and equipment.
Trademarks
The Company owns and maintains trademarks that are used in marketing
specialized products manufactured by Supreme. Management believes that these
trademarks have significant customer goodwill.
Working Capital
The Company utilizes its credit facilities to finance its accounts
receivable and purchase inventories. Pursuant to agreements with the holders
of certain long-term indebtedness, the Company is required to maintain a
minimum working capital of not less than $8 million and a working capital
ratio of at least 1.5 to 1.0.
Major Customers
No single customer or group of customers under common control accounted
for 10% or more of the Company's revenues for each of the three years in the
period ended December 31, 1996. The Company's export sales are not
significant.
Environment Regulation
The Company's manufacturing operations are subject to federal, state,
and local statutes and regulations relating to the protection of the
environment, work site safety standards, and product size and weight
limitations. Such regulations increase the Company's cost of doing business.
Because other companies are subject to similar regulations, such regulations
are not believed to have an adverse effect on the Company's competitive
position.
Employees
As of December 31, 1996, the Company employed approximately 1,480
employees, none of whom are represented by a collective bargaining unit.
The Company considers its relations with its employees to be satisfactory.
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Other Matters
The Company's backlog of firm orders was $27.6 million at
December 31, 1996 compared to $22.5 million at December 31, 1995.
Executive Officers of the Registrant
The name, age, business background, position held with the Registrant
and tenure of each of the Registrant's executive officers are set forth
below. No family relationship exists among any of the executive officers.
Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Herbert M. Gardner, 57 1979 Chairman of the
Senior Vice President of Janney Montgomery Board, President
Scott Inc., investment bankers, since 1978;
Chairman of the Board of the Company since
1979; Shelter Components Corporation,
Director, a supplier to the manufactured
housing and recreational vehicle
industries; Nu Horizons Electronics
Corporation, Director, an electronic
component distributor; Transmedia Network,
Inc., Director, a company that markets a
charge card offering savings to the
company's card members at participating
restaurants and also provides savings on
the purchase of certain other products and
services; Hirsch International Corporation,
Director, importer of computerized embroidery
machines, supplies, and developer of embroidery
machine application software and provider of
other value-added services to the embroidery
industry; TGC Industries, Inc., Director, a
company engaged in the geophysical services
industry; Chase Packaging Corporation,
Director, a specialty agriculture packaging
products company; The Western Systems
Corporation, Director, a company seeking to
redeploy its cash assets through suitable
investments and business combinations.
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Served as
Executive Positions With
Name, Age, and Business Experience Officer Since Company
Omer G. Kropf, 55 1984 Executive Vice
Executive Vice President of the Company President
since August 1985; President and Chief
Executive Officer of Supreme Corporation,
a subsidiary of the Company, since
January 19, 1984; President of a specialized
truck body manufacturing company from 1974
through 1983, the predecessor of Supreme
Corporation.
William J. Barrett, 57 1979 Secretary and
Senior Vice President of Janney Montgomery Assistant
Scott Inc., investment bankers, since 1966; Treasurer
Secretary and Assistant Treasurer of the
Company and a Director since 1979; Esmor
Correctional Services, Inc., Director,
private management and operation of secure
and non-secure corrections and detention
facilities for federal, state and local
corrections agencies; Frederick's of
Hollywood, Inc., Director, an apparel
marketing company; Shelter Components
Corporation, Director, a supplier to the
manufactured housing and recreational
vehicle industries; TGC Industries, Inc.,
Director, a company engaged in the
geophysical services industry; Chase
Packaging Corporation, Director, a
specialty agriculture packaging products
company; The Western Systems Corporation,
Director, a company seeking to redeploy
its cash assets through suitable investments
and business combinations.
Robert W. Wilson, 52 1990 Executive Vice
Treasurer, Executive Vice President, and President,
Chief Financial Officer of the Company since Treasurer and
December 1992; Vice President of Finance of Chief Financial
Supreme Corporation since 1988; Senior Auditor Officer
Price Waterhouse LLP, 1969 through 1973;
Controller Riblet Products Inc., 1973 through
1979; and Vice President Riblet Products Inc.,
1979 through 1988.
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ITEM 2. PROPERTIES.
Supreme has manufacturing operations located in Goshen, Indiana;
Griffin, Georgia; Cleburne, Texas; Moreno Valley, California; Jonestown,
Pennsylvania and Wilson, North Carolina. These manufacturing facilities
aggregate approximately 899,000 square feet of buildings, of which
approximately 474,000 square feet are owned by Supreme and approximately
425,000 square feet are leased. Supreme has distribution facilities located
in Woonsocket, Rhode Island; Apopka, Florida; Louisville, Kentucky;
St. Louis, Missouri; Denver, Colorado; and Houston and San Antonio, Texas.
These distribution facilities aggregate approximately 70,000 square feet of
which approximately 42,000 square feet are owned and 28,000 square feet are
leased. Supreme has supply facilities located in Goshen and Ligonier,
Indiana and La Ceiba, Honduras. These supply facilities aggregate
approximately 112,000 square feet of which approximately 76,000 square feet
are owned and 36,000 square feet are leased.
Of the leased properties, approximately 280,000 square feet of buildings
and approximately 63 acres of land located in Goshen, Indiana and Griffin,
Georgia are leased from a limited partnership controlled by certain members
of the Company's Board of Directors. In addition, a 100,000 square foot
parking lot is leased from one of the Company's Executive Vice Presidents,
and a former owner of Supreme's predecessor. Such board members and
Executive Vice President are herein referred to as the "Affiliated Lessors."
The Company's leases with the Affiliated Lessors (other than the lease
covering the parking lot) will continue through July 25, 2000. Supreme has
the right to renew the leases (except the lease covering the parking lot) for
one additional five-year period through July 25, 2005.
Supreme has an option to purchase all of the properties (excluding the
parking lot) leased to Supreme by the Affiliated Lessors any time during the
lease period or renewal period. The purchase price will be equal to the
higher of: (a) $2,765,000; or (b) $2,765,000 times the figure obtained as a
result of dividing (i) the Consumer Price Index for the month preceding the
month during which the option is exercised, by (ii) the Consumer Price Index
for June 1988.
Supreme Mid-Atlantic began operating in a refurbished manufacturing
facility in June 1990. A 22,500 square foot addition to Supreme Mid-Atlantic
was completed in December 1992. During 1994, Supreme purchased a 22,500
square foot manufacturing plant adjacent to its Cleburne, Texas plant as well
as constructing a 14,000 square foot addition to its existing plant. Also in
1992, the Company purchased 36,760 square feet of manufacturing space in
Jonestown, Pennsylvania and a 48,000 square foot fiberglass parts
manufacturing facility in Goshen, Indiana that was previously leased. The
Company leases approximately 90,000 square feet of manufacturing space in
Wilson, North Carolina.
Supreme purchased a 100,000 square foot manufacturing facility in
Moreno Valley, California in April 1996. This facility replaced a 75,000
square foot facility leased in nearby Riverside, California.
The Company has constructed a facility in Ligonier, Indiana which will
greatly expand its ability to produce Fiberglass Reinforced Panels. The
facility is scheduled to begin operation in the first quarter of 1997.
Initially it will produce for the Company's internal needs, but it is
anticipated that sufficient capacity will be available to allow the Company
to market to other users of FRP panels in the trucking and construction
industries.
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The Company has also constructed a facility in La Ceiba, Honduras which
provides the Company with a reliable, cost efficient source of hardwood
flooring used in its truck bodies. It is projected that production capacity
will allow the Company to market to other users of hardwood flooring.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to
various uncertainties, and it is possible that some of these matters may be
resolved unfavorably to the Company. The Company has established accruals
for matters that are probable and reasonably estimable. Management believes
that any liability that may ultimately result from the resolution of these
matters in excess of accruals and or amounts provided by insurance coverage
will not have a material adverse effect on the consolidated financial
position or results of operation of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted by the Company to a vote of the Company's
security holders, through the solicitation of proxies or otherwise, during
the fourth quarter of the year ended December 31, 1996.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's Class A Common Stock is traded on the American Stock
Exchange (ticker symbol STS). The number of record holders of the Class A
Common Stock as of February 28, 1997 was approximately 452. Due to the
number of shares held in nominee or street name, it is likely that there are
more than 452 beneficial owners of the Company's Class A Common Stock.
The Company's Class A Common Stock closed at $7.00 on the American
Stock Exchange on February 28, 1997 on which date there were 7,980,535 shares
of Class A Common Stock outstanding. High and low closing prices of the
Class A Common Stock for the two year period ended December 31, 1996 were:
1996 1995
High Low High Low
1st Quarter 9 3/16 6 7/8 5 13/16 4 13/16
2nd Quarter 8 1/2 6 13/16 8 1/8 5 7/16
3rd Quarter 7 15/16 6 1/16 9 7 7/8
4th Quarter 6 5/8 4 15/16 8 9/16 6 1/2
All of the 1,402,975 outstanding shares of the Company's Class B Common
Stock were held by a total of 14 persons as of February 28, 1997 There is no
established trading market for the Class B Common Stock. Class B Common
Stock is freely convertible on a one-for-one basis into an equal number of
shares of Class A Common Stock and ownership of the Class B shares is deemed
to be beneficial ownership of the Class A shares under Rule 13d-3(d) (1)
promulgated under the Securities Exchange Act of 1934.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
For the Years Ended December 31,
Consolidated Income Statement
Data: (in millions, except per
share amounts)
1996 1995 1994 1993 1992
Net revenue $ 159.9 $ 164.5 $ 137.3 $ 114.4 $ 84.0
Income from continuing operations 5.1 7.2 5.5 4.3 2.1
Loss from discontinued operation(1) - - - - (2.1)
Net income $ 5.1 $ 7.2 $ 5.5 $ 4.3 $ 0.0
Net income (loss) per share:(2)
Primary earnings per share:
Continuing operations $ .55 $ .84 $ .67 $ .56 $ .40
Discontinued operation(1) - - - - (.39)
Net income $ .55 $ .84 $ .67 $ .56 $ .01
Fully diluted earnings per
share:
Continuing operations $ .54 $ .80 $ .64 $ .51 $ .30
Consolidated Balance Sheet Data:
(in millions)
Working capital $ 23.4 $ 23.1 $ 20.0 $ 13.9 $ 9.7
Total assets 68.8 62.4 57.6 45.5 34.8
Long-term debt (excluding current
maturities) 16.1 18.0 19.7 13.6 13.8
Stockholders' equity 35.8 28.8 20.0 14.0 6.6
(1) Loss from discontinued operations represents the operations of
Contempri Homes, Inc., which was accounted for as a discontinued
operation and spun-off effective December 31, 1992.
(2) All per share amounts have been restated for the 10% common stock
dividend paid on December 22, 1995.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Comparison of 1996 with 1995
Revenues for 1996 declined 2.8% to $159.9 million from $164.5 million
recorded in 1995. The largest decreases occurred at the Company's Goshen
manufacturing facilities where truck equipment products declined $4.5 million
and shuttle buses declined $3.4 million. The truck equipment decrease was
primarily due to less overall industry-wide demand as the Company believes it
maintained or increased market share. The Company's shuttle bus business was
unfavorably affected by delays and reductions in orders from municipal
customers. The Company's Northeastern and Southwestern markets were also off
slightly when compared to 1995. The Company's Southeastern and Western
markets recorded increases of approximately 12% and 11% respectively, which
partially offset the decreases experienced elsewhere.
The Company's gross profit percentage declined 1.1% in 1996 to 16.1%
from 17.2% in 1995. The Company's raw material costs held constant over the
year and improved slightly, as a percentage of revenues, from 1995 as two
price increases implemented during 1995 were in effect for all of 1996.
Offsetting the improvement in material costs were increases in both direct
labor and overhead costs. Contributing to these increases were costs
associated with the numerous projects the Company has undertaken during 1996.
Dual rents and the cost of moving to a new manufacturing facility in
California increased both labor and overhead. Labor and overhead were
incurred in the start-up of three new distribution facilities in Louisville,
St. Louis and Denver. Also affecting labor and overhead were the development
costs associated with the two new product lines, Pro Fleet Conversions and
Freedom One (trademark) paratransit vans. In addition, there were
preoperating and start-up costs incurred at both the Fiberglass Reinforced
Panel (FRP) manufacturing facility and the Honduran hardwood flooring plant
while revenues from these facilities won't commence until 1997.
Selling, general and administrative expenses were $15.4 million or 9.7%
of revenue compared with $14.3 million or 8.7% of revenue in 1995. The
increase in selling expense of $886,000 can be attributed to additional sales
staff at the new distribution facilities and also associated with the
Company's new product lines. Costs associated with the development of
literature for the new product lines also contributed to the increase.
Administrative costs increased $292,000 primarily due to the addition of the
new distribution and manufacturing facilities as well as the new product
lines.
Interest expense declined $250,000 to $1,531,000 in 1996 from $1,781,000
in 1995. Causing the decline was the conversion of the Series B convertible
debt to Class A Common Stock as well as overall lower outstanding borrowings
during the period. The Company used floating rate industrial revenue bonds
to finance its California facility. The rate at December 31, 1996 was 4.15%.
The Company's effective income tax rate of 41.9% in 1996 was comparable
to the 40.6% rate in 1995. The slight increase is attributed to the net
operating loss of the Company's wholly owned subsidiary in Honduras, for
which there is no tax benefit since the Honduran subsidiary is operating in
a government free zone.
<PAGE>
Comparison of 1995 with 1994
Revenues for 1995 increased 19.7% to $164.5 million from the $137.3
million recorded in 1994. Each of the Company's six manufacturing
facilities achieved double digit growth. Total unit shipments were up
approximately 8% with the balance of the increased revenues resulting from
changes in product mix and selective price increases. Revenue at Supreme's
StarTrans (trademark) line of shuttle buses also increased significantly
during 1995. This product is sold through our extensive distributor network
to end users that represent essentially non-cyclical markets.
The Company's gross profit percentage in 1995 improved to 17.2%,
compared with 16.8% in 1994. The improvement can be attributed to direct
labor efficiencies on larger production runs during the year and to the fixed
nature of certain components of the overhead pool that do not rise when
revenues increase. Offsetting these improvements were increases in the cost
of the Company's basic raw materials. The Company implemented two price
increases during the year in both its truck body and bus product lines to
mitigate the effect of raw material cost increases. However, based on
production cycles, benefits from the selling price increases were delayed an
average 8 to 12 weeks from the announcement while the higher raw material
costs were more immediate in their impact on cost of goods sold.
Selling, general and administrative expenses were $14.3 million or 8.7%
of revenue in 1995, compared with $12.1 million or 8.8% of revenue in 1994.
Selling expenses increased $1.0 million during the year, but as a percentage
of revenues remained constant at 3.8%. Many categories within the selling
classification, e.g. literature, promotions, travel and entertainment, and
commissions, were approximately the same percentage of revenue in each
period.
Administrative expenses increased $1.1 million but declined to 4.8% of
revenues from 5.0% in 1994. The decline can be attributed to those items
that do not correlate directly with revenues.
Interest expense increased to $1.8 million in 1995 from $1.6 million in
1994. It declined as a percentage of revenues to 1.1% in the current year
compared to 1.2% in 1994. The rise in interest expense can be directly
correlated to the higher levels of inventories and accounts receivable
financed by borrowings required to support the 19.7% revenue increase.
The Company's effective income tax rate of 40.6% in 1995 was comparable
to the 41.4% rate in 1994.
Liquidity and Capital Resources
Cash flows from operations, funding available under the Company's
revolving credit agreement and the proceeds from the California industrial
revenue bonds were adequate to finance operations and provide for capital
expenditures during 1996. Cash flows from operating activities were $7.5
million for the year ended December 31, 1996 compared to $6.1 million and
$.2 million for the years ended December 31, 1995 and 1994, respectively.
For each of the three years, net income, adjusted by certain noncash items
such as depreciation, was the most significant factor in generating operating
cash flows. In all three years, the Company has used operating cash to
finance increased inventory levels. The increase in inventories in 1995 and
1994 reflected the higher revenues experienced in those years while the
increase in 1996 is due to higher revenues as compared to the same period of
1995 as well as the need to carry chassis in inventory to support the
Company's two new product lines, Freedom One (trademark) and Pro Fleet
Conversions. In 1996, this increase in inventories was offset by an increase
in trade accounts payable and other current liabilities, while in 1995 and
1994 the Company had used operating cash to reduce these liabilities.
<PAGE>
The largest investing activity during 1996 was the $3.2 million
acquisition of the California plant, consisting of 19 acres of land and a
100,000 square foot manufacturing facility. Other major capital expenditures
during 1996 were the patented Fiberglass Reinforced Panel ("FRP") machine,
the Honduran hardwood flooring plant and the purchase of land and
construction of a new distribution facility to service the Louisville -
Cincinnati area. The distribution and hardwood flooring facilities are
complete while the FRP facility is substantially complete. During 1995,
investing activities included capital expenditures associated with the FRP
machine, the hardwood flooring facility and a distribution facility in
Rhode Island, while 1994 included the acquisition of Murphy Body Company for
$1.1 million and capital expenditures of $7.0 million which included a
fiberglass parts manufacturing facility for $959,000, additions to the
Jonestown, Pennsylvania and Cleburne, Texas plants aggregating $1,150,000 and
$695,000 respectively, and the purchase of Houston and San Antonio
distribution facilities for $373,000 and $354,000 respectively.
The major financing activities providing cash flows during 1996 were a
$3.2 million floating rate industrial revenue bond for the acquisition of the
California plant and borrowings under the Company's revolving line of credit.
During 1995 and 1994, financing activities providing cash flows were
primarily the revolving line of credit and real estate mortgages on specific
acquisitions. The Company has a $14.0 million revolving line of credit that
increases to $20.0 million for the period February 1 through June 30 of each
year. The increase during the February through June period is necessary to
finance working capital needs in preparation for substantial fleet orders
that have stringent delivery requirements over a relatively short period of
time. To meet these requirements, the Company must build finished product in
advance of its scheduled delivery date so that it is available when required.
The Company realized proceeds of $.9 million from the exercise of
warrants and stock options during the year. During 1996, 278,702 of the
Company's 1993 Callable Warrants were exercised for cash, 2,141,705 were
exchanged for Class A Common Stock (on a 5 warrants for 1 Class A Common
Share basis) and 60,355 warrants expired. In addition, the 8.6% convertible
Series B notes outstanding at December 31, 1995 were converted into 263,262
shares of Class A Common Stock on May 21, 1996. At December 31, 1996, the
Company has no outstanding warrants or convertible debt.
The Company anticipates that available funds, together with anticipated
cash flows generated from future operations and amounts available under its
revolving line of credit will be sufficient to meet the Company's cash needs
during 1997.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required to be filed pursuant to this Item 8
are included elsewhere in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Directors - Certain information required by Item 10 of Form 10-K
is hereby incorporated by reference from the Company's definitive proxy
statement, which will be filed pursuant to Regulation 14A within 120 days
after the Company's year end for the year covered by this report, under the
caption "Election of Directors" of the proxy statement.
(b) Executive Officers - See "Executive Officers of the Registrant"
in Item 1 of Part I of this form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 of Form 10-K is hereby incorporated
by reference from the Company's definitive proxy statement, which will be
filed pursuant to Regulation 14A within 120 days after the Company's year end
for the year covered by this report, under the caption "Executive
Compensation" of the proxy statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 of Form 10-K is hereby incorporated
by reference from the Company's definitive proxy statement, which will be
filed pursuant to Regulation 14A within 120 days after the Company's year end
for the year covered by this report, under the caption "Security Ownership of
Certain Beneficial Owners and Management" of the proxy statement.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 of Form 10-K is hereby incorporated
by reference from the Company's definitive proxy statement, which will be
filed pursuant to Regulation 14A within 120 days after the Company's year end
for the year covered by this report, under the caption "Transactions with
Management" of the proxy statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Form 10-K
a. Documents filed as part of this report: Page
1. Financial Statements
Report of Independent Accountants A-1
Consolidated Balance Sheets as of
December 31, 1996 and 1995 A-2
Consolidated Statements of Income for
the years ended December 31, 1996,
1995 and 1994 A-3
Consolidated Statements of Stockholders'
Equity for the years ended December 31,
1996, 1995 and 1994 A-4
Consolidated Statements of Cash Flows for
the years ended December 31, 1996, 1995
and 1994 A-5
Notes to the Consolidated Financial
Statements A-6
through A-16
2. Financial Statement Schedule:
Report of Independent Accountants on
Financial Statement Schedule S-1
Schedule II - Valuation and Qualifying
Accounts S-2
Schedules other than those listed above are omitted because they are
not required or the information is included in the Notes to the Consolidated
Financial Statements.
<PAGE>
3. Exhibits:
See Index to Exhibits
b. Reports on Form 8-K
No report on Form 8-K was filed during the three month period ended
December 31, 1996.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of
Supreme Industries, Inc.:
We have audited the accompanying consolidated balance sheets of Supreme
Industries, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Supreme
Industries, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
South Bend, Indiana
January 24, 1997
A-1
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Consolidated Balance Sheets
as of December 31, 1996 and 1995
ASSETS
1996 1995
Current assets:
Cash and cash equivalents $ 220,678 $ 106,740
Accounts receivable, net of
allowance for doubtful
accounts of $430,000 in
1996 and 1995 16,556,258 16,336,446
Inventories 21,208,707 20,144,271
Deferred income taxes 1,043,066 910,918
Other current assets 423,237 448,665
Total current assets 39,451,946 37,947,040
Property, plant and equipment, net 26,429,637 21,454,511
Intangible assets, net 1,908,694 2,112,004
Other assets 1,038,747 913,107
Total assets $ 68,829,024 $ 62,426,662
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 2,355,955 $ 2,609,815
Trade accounts payable 6,778,942 6,343,766
Accrued wages and benefits 3,353,291 3,456,139
Accrued income taxes 959,240 138,682
Other accrued liabilities 2,561,024 2,259,740
Total current liabilities 16,008,452 14,808,142
Long-term debt 16,108,780 18,031,553
Deferred income taxes 890,234 784,086
Total liabilities 33,007,466 33,623,781
Commitments and contingencies (Note I)
Stockholders' equity:
Preferred Stock, $1 par value;
authorized 1,000,000 shares,
none issued
Class A Common Stock, $.10 par value;
authorized 20,000,000 shares,
issued 8,012,767 shares in 1996
and 6,738,610 shares in 1995 801,277 673,861
Class B Common Stock, convertible
into Class A Common Stock on a
one-for-one basis, $.10 par value;
authorized 5,000,000 shares, issued
1,402,975 shares in 1996 and
1,801,663 shares in 1995 140,297 180,166
Additional paid-in capital 23,901,587 18,911,421
Retained earnings 11,228,933 9,193,919
Treasury stock, Class A Common Stock,
at cost, 32,232 shares in 1996 and
15,132 shares in 1995 (250,536) (156,486)
Total stockholders' equity 35,821,558 28,802,881
Total liabilities and
stockholders' equity $ 68,829,024 $ 62,426,662
The accompanying notes are a part of the consolidated financial statements.
A-2
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Consolidated Statements Of Income
for the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Revenue:
Net sales $ 159,214,622 $ 163,449,175 $ 136,545,869
Other income 661,486 1,001,804 803,757
159,876,108 164,450,979 137,349,626
Costs and expenses:
Cost of sales 134,153,108 136,224,658 114,233,435
Selling, general and
administrative 15,434,432 14,255,971 12,146,018
Interest 1,530,624 1,781,350 1,632,590
151,118,164 152,261,979 128,012,043
Income before income
taxes 8,757,944 12,189,000 9,337,583
Income taxes 3,671,000 4,949,000 3,865,000
Net income $ 5,086,944 $ 7,240,000 $ 5,472,583
Earnings per share:
Primary $.55 $.84 $.67
Fully diluted $.54 $.80 $.64
Weighted-average number of
shares of common stock
and common stock
equivalents:
Primary 9,308,897 8,594,104 8,143,373
Fully diluted 9,411,206 9,261,114 8,755,544
The accompanying notes are a part of the consolidated financial statements.
A-3
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Consolidated Statements Of Stockholders' Equity
for the years ended December 31, 1996, 1995 and 1994
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Common Stock Class B Common Stock Additional Retained Treasury
Shares Amount Shares Amount Paid-In-Capital Earnings Stock Total
Balance, January 1, 1994 5,468,980 $ 546,898 1,751,196 $ 175,119 $ 9,203,188 $ 4,267,569 $ (156,486) $ 14,036,288
Net income - - - - - 5,472,583 - 5,472,583
Conversion of 36,046
shares of Class B
Common Stock to Class
A Common Stock 36,046 3,604 (36,046) (3,604) - - - -
Exercise of stock options 12,001 1,201 - - 11,133 - - 12,334
Exercise of warrants and
related activity 197,959 19,796 - - 1,739,223 (1,285,081) - 473,938
Balance, December 31, 1994 5,714,986 571,499 1,715,150 171,515 10,953,544 8,455,071 (156,486) 19,995,143
Net income - - - - - 7,240,000 - 7,240,000
Conversion of 77,268
shares of Class B
Common Stock to Class
A Common Stock 77,268 7,727 (77,268) (7,727) - - - -
Conversion of $1,500,000
face amount of 8.6%
convertible Series B
notes 316,455 31,645 - - 1,468,355 - - 1,500,000
Exercise of stock options 17,400 1,740 - - 65,998 - - 67,738
10% Common Stock dividend 612,501 61,250 163,781 16,378 6,423,524 (6,501,152) - -
Balance, December 31, 1995 6,738,610 673,861 1,801,663 180,166 18,911,421 9,193,919 (156,486) 28,802,881
Net income - - - - - 5,086,944 - 5,086,944
Conversion of 398,688
shares of Class B
Common Stock to Class
A Common Stock 398,688 39,869 (398,688) (39,869) - - - -
Conversion of $1,134,428
face amount of 8.6%
convertible Series B
notes 263,262 26,326 - - 1,108,102 - - 1,134,428
Exercise of stock options 30,580 3,058 - - 52,307 - - 55,365
Exercise and exchange of
warrants 581,627 58,163 - - 3,829,757 (3,051,930) - 835,990
Acquisition of 17,100
shares of treasury stock - - - - - - (94,050) (94,050)
Balance, December 31, 1996 8,012,767 $ 801,277 1,402,975 $ 140,297 $ 23,901,587 $ 11,228,933 $ (250,536) $ 35,821,558
</TABLE>
The accompanying notes are a part of the consolidated financial statements.
A-4
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Consolidated Statements Of Cash Flows
for the years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Cash flows from operating activities:
Net income $ 5,086,944 $ 7,240,000 $ 5,472,583
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,963,497 1,772,421 1,497,689
Amortization of intangibles 203,310 203,310 203,310
Provision for losses on doubtful
receivables 184,273 317,885 446,550
Deferred income taxes (26,000) 45,000 (110,000)
Gain on sale of property, plant
and equipment (11,403) (20,852) (38,303)
Changes in operating assets and
liabilities, excluding effects
of acquisitions in 1996 and
1994:
Accounts receivable (404,085) (996,010) (2,809,345)
Inventories (943,429) (428,751) (2,660,372)
Other current assets 41,246 (220,504) 5,322
Trade accounts payable 435,176 (1,057,732) (2,840,852)
Other current liabilities 1,018,994 (757,034) 1,071,679
Net cash provided by
operating activities 7,548,523 6,097,733 238,261
Cash flows from investing activities:
Acquisitions of businesses (221,725) - (1,142,102)
Additions to property, plant and
equipment (6,874,667) (5,849,425) (6,992,143)
Proceeds from sale of property,
plant and equipment 32,347 108,811 86,284
Increase in other assets (125,640) (38,107) -
Net cash (used in)
investing activities (7,189,685) (5,778,721) (8,047,961)
Cash flows from financing activities:
Proceeds from revolving line of
credit and other long-term debt 69,494,785 68,634,487 75,083,334
Repayments of revolving line of
credit and other long-term debt (70,536,990) (69,188,217) (68,128,525)
Proceeds from exercise of stock
options and warrants 891,355 67,738 486,272
Acquisition of treasury stock (94,050) - -
Net cash provided by
(used in) financing
activities (244,900) (485,992) 7,441,081
Increase (decrease) in cash and cash
equivalents 113,938 (166,980) (368,619)
Cash and cash equivalents, beginning
of year 106,740 273,720 642,339
Cash and cash equivalents, end of
year $ 220,678 $ 106,740 $ 273,720
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest, net of capitalized
interest in 1996 and 1995 $ 1,517,102 $ 1,777,487 $ 1,524,166
Income taxes 2,876,442 5,577,560 4,105,652
Noncash investing and financing
activities:
Liabilities assumed in acquisition
of a business - - 937,842
Conversion of convertible notes to
shares of Class A Common Stock 1,134,428 1,500,000 -
Conversion of Class B Common Stock
to Class A Common Stock 39,869 7,727 3,604
Exchange of warrants for Class A
Common Stock 428,340 - 389,617
Exchange of Class A Common Stock
upon exercise of warrants - - 1,154,580
10% Common Stock dividend - 6,501,152 -
The accompanying notes are a part of the consolidated financial statements.
A-5
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES.
Supreme Industries, Inc. and its subsidiaries (collectively the
"Company") manufacture specialized truck bodies that are mounted on new
truck chassis produced by others. The Company's truck body products
include cut-away and dry freight van bodies, refrigerated units and
stake bodies. The Company also manufactures shuttle buses and trailers.
At December 31, 1996, the Company has 15 manufacturing, distribution and
supply facilities in the United States and during 1996 completed
construction of a captive hardwood flooring supply facility in Honduras.
The Company's customers are located principally in the United States.
The following is a summary of the significant accounting policies used
in the preparation of the accompanying consolidated financial statements:
Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of Supreme Industries, Inc. and its
wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Revenue Recognition and Concentration of Credit Risk - The production
of specialized truck bodies and shuttle buses starts when an order is
received from the customer. Revenue is recognized when the unit is
shipped to the customer. Concentration of credit risk is limited due
to the large number of customers and their dispersion among many
different industries and geographic regions. The Company performs an
ongoing credit evaluation of its customers' financial condition, and
credit is extended to customers on an unsecured basis. Future credit
losses are provided for currently through the allowance for doubtful
accounts and actual credit losses are charged to the allowance when
incurred.
Earnings Per Share - Primary earnings per share is determined by
dividing net income by the weighted average number of shares of common
stock (both classes) and common stock equivalents, if dilutive,
outstanding during the year. Fully diluted earnings per share for 1995
and 1994 includes the impact of convertible debt (see Note D).
Cash and Cash Equivalents - The Company considers all highly liquid
investments with original maturities of three months or less to be
cash equivalents.
Fair Value of Financial Instruments - The carrying amounts of cash and
cash equivalents, accounts receivable and trade accounts payable
approximated fair value as of December 31, 1996 and 1995, because of
the relatively short maturities of these instruments. The carrying
amount of senior long-term debt, including current maturities,
approximated fair value as of December 31, 1996 and 1995, based upon
terms and conditions available to the Company at those dates in
comparison to terms and conditions of the senior long-term debt. The
Company's outstanding subordinated debt at December 31, 1995
(see Note D) was converted into the Company's Class A Common Stock
during the year ended December 31, 1996. Based upon the market value
of the Class A Common Stock at December 31, 1995 and the conversion
ratio, the fair value of the subordinated debt approximated $2.2
million at December 31, 1995 compared to its carrying value of
$1,134,428.
Inventories - Inventories are stated at the lower of cost or market,
with cost determined using the first-in, first-out method.
A-6
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Continued.
Property, Plant and Equipment - Property, plant and equipment are
recorded at cost. For financial reporting purposes, depreciation is
provided based on the straight-line method over the estimated useful
lives of the assets. Amortization of leasehold improvements, for
financial reporting purposes, is determined by the straight-line method
over the lesser of the useful life of the asset or term of the lease.
Upon sale or other disposition of assets, the cost and related
accumulated depreciation and amortization are removed from the accounts
and any resulting gain or loss is reflected in operations.
Expenditures for maintenance and repairs are charged to operations as
incurred. Maintenance and repair expenses were $1,972,189, $1,865,031
and $1,895,990 for the years ended December 31, 1996, 1995 and 1994,
respectively. Betterments and major renewals are capitalized and
recorded in the appropriate asset accounts.
Capitalized Interest - Interest costs capitalized during the
construction period of new buildings, machinery and equipment were
$199,000 and $200,000 for the years ended December 31, 1996 and 1995,
respectively (none in 1994).
Intangible Assets - Intangible assets consist of goodwill $3,379,031
and patents - $325,000, and are recorded at cost and shown net of
accumulated amortization. Amortization of goodwill is provided using
the straight-line method over the estimated benefit period (16 to 25
years), and patents are amortized over seven years using the
straight-line method. Accumulated amortization at December 31, 1996
and 1995 was $1,795,337 and $1,592,027, respectively.
Warranty - Estimated warranty costs are provided at the time of sale and
are based upon historical experience and have averaged less than one
percent (1%) of net sales.
Income Taxes - Deferred income taxes are determined using the liability
method.
Use of Estimates in the Preparation of Financial Statements - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Stock-Based Compensation - The Company has adopted the disclosure only
provisions of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" and, accordingly, accounts for
its stock option plan under the provisions of Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees."
A-7
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Concluded.
Evaluation of Impairment of Long-Lived Assets - In accordance with
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of," the Company evaluates the carrying value of long-lived
assets whenever significant events or changes in circumstances indicate
the carrying value of these assets may be impaired. The Company
evaluates potential impairment of long-lived assets by comparing the
carrying value of the assets to the expected net future cash inflows
resulting from use of the assets. Management believes that no impairment
of long-lived assets has occurred.
B. INVENTORIES.
Inventories consist of the following:
1996 1995
Raw materials $ 12,076,089 $ 11,599,585
Work-in-progress 3,138,668 3,113,990
Finished goods 5,993,950 5,430,696
Total $ 21,208,707 $ 20,144,271
C. PROPERTY, PLANT AND EQUIPMENT.
Property, plant and equipment
consists of the following:
1996 1995
Land and improvements $ 2,901,754 $ 2,123,848
Buildings and improvements 10,640,300 7,688,414
Leasehold improvements 5,582,044 4,845,816
Machinery and equipment 17,885,392 15,072,557
Construction in progress 3,666,383 4,153,012
40,675,873 33,883,647
Less, Accumulated
depreciation and
amortization 14,246,236 12,429,136
Property, plant
and equipment,
net $ 26,429,637 $ 21,454,511
A-8
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statement, Continued
D. LONG-TERM DEBT.
Long-term debt consists of the following:
1996 1995
Senior Debt:
Revolving line of credit $ 9,104,791 $ 11,872,822
Term note 2,333,325 3,333,333
Obligations under industrial
development revenue bonds,
variable rates, with maturities
in August 2010 and April 2011,
collateralized by specific real
estate 3,901,122 766,667
Real estate mortgages, variable
rate and fixed rates (7.25% to
9.50%), with various maturities
from September 1997 to June 2009 3,125,497 3,534,118
18,464,735 19,506,940
Subordinated Debt:
8.6% convertible Series B notes - 1,134,428
Total debt 18,464,735 20,641,368
Less, Current maturities 2,355,955 2,609,815
Long-term debt $ 16,108,780 $ 18,031,553
A-9
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
D. LONG-TERM DEBT, Concluded.
The revolving line of credit, term note and a letter of credit facility
are part of a master credit agreement (the "Credit Agreement"). During
the year ended December 31, 1996, the Credit Agreement was amended to
increase availability from $12 million (subject to certain limitations
based on the borrowing base, as defined) to $14 million and increasing to
$20 million during the period each year from February 1 to and including
June 30; to delete the borrowing base requirements; to extend the
maturity date of the revolving line of credit from April 30, 1997 to
April 30, 1999; and to provide that all borrowings under the Credit
Agreement are unsecured borrowings. Interest on outstanding borrowings
under the revolving line of credit is based on the bank's prime rate or
certain basis points above the LIBOR rate depending on the pricing option
selected and the Company's leverage ratio, as defined. The weighted
average interest rate on borrowings outstanding at December 31, 1996 and
1995 was 7.2% and 7.7%, respectively. The revolving line of credit also
requires a commitment fee ranging from 3/16% to 1% per annum depending
on the Company's leverage ratio and based upon the annualized average
unused portion. All amounts outstanding under the revolving line of
credit will be due at maturity, April 30, 1999. The term note provides
for monthly payments of $83,333 plus interest through April 1999.
Interest on the term note is based on a fixed rate of 6.4%. The Credit
Agreement makes letters of credit available up to $5 million.
Outstanding letters of credit, which reduce availability under the
revolving line of credit, aggregated $1.7 million at December 31, 1996.
Under a separate agreement, the Company has an outstanding $3.2 million
irrevocable letter of credit in favor of the bond trustee as a credit
enhancement for bondholders of one of the industrial development revenue
bonds.
The Credit Agreement contains, among other matters, certain restrictive
covenants including maintenance of a minimum consolidated tangible net
worth of $22 million plus 50% of cumulative net income of the Company, as
defined, after December 31, 1995 ($24,543,472 at December 31, 1996),
minimum consolidated working capital of $8 million, required financial
ratios and restrictions on capital expenditures and dividend payments.
The Company's cash management system and revolving line of credit are
designed to maintain zero cash balances and, accordingly, checks
outstanding in excess of bank balances are classified as additional
borrowings under the revolving line of credit. Checks outstanding in
excess of bank balances at December 31, 1996 and 1995 aggregated
$1,905,000 and $2,073,000, respectively.
The 8.6% convertible Series B notes were converted into 263,262 shares
of Class A Common Stock on May 21, 1996 at a conversion price of $4.31.
The subordinated debt was payable to a related party (an entity which
already had a direct and beneficial ownership interest in the Company's
Common Stock). If the conversion of the subordinated debt had occurred
on January 1, 1996, primary earnings per share for 1996 would have been
$.54.
Maturities of long-term debt for each of the next five years are as
follows: 1997 - $2,355,955; 1998 - $2,133,055; 1999 - $10,111,361;
2000 - $331,110 and 2001 - $666,045.
A-10
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
E. RETIREMENT PLAN.
The Company maintains a defined contribution plan which covers
substantially all employees of the Company and its participating
subsidiaries who have reached the age of twenty-one years and have
completed one year of credited service. The plan provides that eligible
employees can contribute from one to fifteen percent of their annual
compensation and the Company will match fifteen percent (ten percent
prior to March 1, 1994) of employees' contributions up to six percent of
the employees' compensation. The Board of Directors may increase or
decrease the Company's contribution on a year-by-year basis. Expense
related to this plan for the years ended December 31, 1996, 1995 and 1994
was $147,762, $149,249 and $90,387, respectively.
F. STOCKHOLDERS' EQUITY.
Common Stock
On May 2, 1996, the Company's stockholders approved a resolution, which
amended the Company's Articles of Incorporation, to increase the number of
authorized shares of Class A Common Stock from 15,000,000 shares to
20,000,000 shares.
On November 20, 1996, the Board of Directors authorized the Company to
repurchase up to 500,000 shares of Class A Common Stock in open market
purchases or privately negotiated transactions through the close of
business on November 28, 1997.
On November 29, 1995, the Board of Directors declared a 10% common stock
dividend payable on December 22, 1995, to stockholders of record on
December 15, 1995.
Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock
($1 par value), of which none has been issued. The Board of Directors
is vested with the authority to determine and state the designations and
relative preferences, limitations, voting rights, if any, and other
rights of the preferred shares.
Convertible Class B Common Stock
Class B Common Stock is convertible into Class A Common Stock on a
one-for-one basis. Holders of Class A Common Stock are entitled to elect
one-third of the Board of Directors, rounded to the lowest whole number.
Holders of Class B Common Stock elect the remainder of the directors.
A-11
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
F. STOCKHOLDERS' EQUITY, Continued.
Stock Options
During 1992, the Company adopted a 1992 Stock Option Plan (the "1992
Plan") under which 330,000 (adjusted for the 10% stock dividend) shares
of Class A Common Stock were reserved for grant. Under the terms of the
1992 Plan, both incentive stock options and non-statutory stock options
can be granted by a specially designated Stock Option Committee. The
option terms, such as restrictions on exercise, are as determined by the
Stock Option Committee.
The following table summerizes stock option activity:
Number Exercise
of Shares Price *
Outstanding, January 1, 1994 176,501 $.75 to $5.38
Granted 15,000 6.00
Exercised (12,001) .75 to 1.25
Expired (3,000) 5.38
Outstanding, December 31, 1994 176,500 1.25 to 6.00
Exercised (17,400) 3.89
Effect of 10% stock dividend 15,910 1.14 to 5.45
Outstanding, December 31, 1995 175,010 3.78
Granted 50,000 7.13
Exercised (30,580) 1.81
Outstanding, December 31, 1996 194,430 4.95
* The exercise price presented for 1996 represents the
weighted-average exercise price in accordance with Statement of
Financial Accounting Standards No. 123. Amounts for 1995 and 1994
represent the range of exercise prices in accordance with
Accounting Principles Board Opinion No. 25.
At December 31, 1995 and 1994 there were exercisable options outstanding
to purchase 118,506 and 67,167 shares at weighted-average exercise prices
of $5.14 and $3.64, respectively.
Options outstanding at December 31, 1996 are exercisable at prices
ranging from $2.25 to $7.13 and have a weighted-average remaining
contractual life of 2.5 years. The following table summarizes
information about outstanding and exercisable stock options at
December 31, 1996:
Outstanding Exercisable
Number Weighted - Number
Outstanding Average Weighted - Exercisable Weighted -
At Remaining Average At Average
Range of December 31, Contractual Exercise December 31, Exercise
Exercise Price 1996 Life Price 1996 Price
$2.25 - $5.00 127,930 1.7 years $4.04 127,930 $4.04
5.01 - 7.13 66,500 3.9 years 6.71 11,000 5.46
194,430 138,930
Pro forma net income and earnings per share for 1996 and 1995 and the
weighted-average grant-date fair value of options granted are not
presented as amounts are not material.
A-12
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
F. STOCKHOLDERS' EQUITY, Concluded.
Callable Warrants
At December 31, 1995, the Company had 2,480,762 outstanding 1993 Callable
Warrants. Each 1993 Callable Warrant entitled the holder to purchase .55
share of Class A Common Stock at an exercise price of $5.45 per whole
share. Effective February 16, 1996, the Board of Directors modified the
exercise provisions of the warrants to allow warrant holders the option
of exchanging 5 warrants for 1 share of Class A Common Stock or to
satisfy the exercise price in cash. During the year ended
December 31, 1996, 278,702 warrants were exercised for cash, 2,141,705
warrants were exchanged for Class A Common Stock on a 5 warrants for 1
share basis and 60,355 warrants expired on June 9, 1996.
At December 31, 1993, the Company had 645,990 callable warrants
outstanding, each entitling the holder to purchase 1.19 shares of Class A
Common Stock for $5.05 per share. Effective September 22, 1994, the
Board of Directors modified the exercise provisions of the warrants to
allow warrant holders the option of exchanging 5 warrants for 1 share of
Class A Common Stock or satisfying the exercise price described above in
cash or shares of Class A Common Stock of the Company previously owned by
the warrant holder, or some combination thereof. During the year ended
December 31, 1994, 79,273 warrants were exercised for cash, 192,430
warrants were exercised utilizing shares of Class A Common Stock of the
Company for payment, 318,105 warrants were exchanged for Class A Common
Stock on a 5 warrants for 1 share basis and 56,182 warrants expired on
November 30, 1994.
A-13
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
G. INCOME TAXES.
Income taxes consist of the following:
1996 1995 1994
Federal:
Current $ 3,051,000 $ 3,953,000 $ 3,200,000
Deferred (21,000) 37,000 (90,000)
3,030,000 3,990,000 3,110,000
State:
Current 646,000 951,000 775,000
Deferred (5,000) 8,000 (20,000)
641,000 959,000 755,000
Total $ 3,671,000 $ 4,949,000 $ 3,865,000
The components of the net deferred tax asset and the net deferred tax
liability were as follows:
1996 1995
Current deferred tax asset:
Allowance for doubtful receivables $ 166,099 $ 166,099
Inventories 220,134 220,134
Accrued liabilities 641,527 502,848
Other 15,306 21,837
Deferred tax asset $ 1,043,066 $ 910,918
Long-term deferred tax liability:
Depreciation $ 838,650 $ 712,505
Other 51,584 71,581
Deferred tax liability $ 890,234 $ 784,086
A reconciliation of the provision for income taxes to the amount computed
by applying the statutory Federal income tax rate (34% in 1996, 35% in
1995 and 34% in 1994) to income before income taxes is as follows:
1996 1995 1994
Income taxes at statutory
rate $ 2,977,700 $ 4,266,200 $ 3,174,800
State income taxes, net of
federal benefit 423,100 623,300 498,300
Amortization of goodwill 35,800 36,900 35,800
Loss of Honduran subsidiary
(operating in government
free zone) with no tax
benefit 98,000 - -
Other 136,400 22,600 156,100
Total $ 3,671,000 $ 4,949,000 $ 3,865,000
A-14
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Continued
H. ACQUISITIONS.
On February 28, 1996, the Company acquired the business operations and
operating assets, including the Freedom One (trademark) brand name, of
SD Enterprises, Inc., an Elkhart, Indiana company that converts minivans
for use by wheelchair-bound drivers and passengers. The cash purchase
price of $221,725 approximated the fair value of the acquired assets.
On August 29, 1994, the Company acquired the business operations and
substantially all of the operating assets of Murphy Body Company, Inc.,
Wilson, North Carolina, a manufacturer of refrigerated truck bodies.
The purchase price, which approximated the fair value of the acquired
assets, consisted of cash of $1,142,102 and assumed liabilities of
$937,842.
Both these acquisitions were accounted for as purchases, and the net
assets and results of operations have been included in the Company's
consolidated financial statements from the acquisition date. Pro forma
financial information has not been presented as it is not materially
different from the Company's historical results.
I. COMMITMENTS AND CONTINGENCIES.
Lease Commitments
The Company leases certain office and manufacturing facilities under
operating lease agreements which expire at various dates through
May 2002. Certain of the lease agreements are with related parties for
which related party rent expense for the years ended December 31, 1996,
1995 and 1994 aggregated $478,162, $478,163 and $446,442, respectively.
The rent expense under all operating leases aggregated $1,139,210,
$1,027,606 and $984,177 for the years ended December 31, 1996, 1995 and
1994, respectively.
At December 31, 1996, future minimum annual rental payments under
noncancelable operating leases aggregated $2,959,000, and are payable as
follows: 1997 - $967,000; 1998 - $869,000; 1999 $742,000;
2000 - $341,000; 2001 - $31,000 and thereafter $9,000.
Obligation To Purchase Consigned Inventories
The Company obtains vehicle chassis for its truck, bus and specialized
vehicle products directly from the truck manufacturer under converter
pool agreements. Chassis are obtained from the manufacturers based on
orders from customers, and to a lesser extent, for unallocated orders.
Although each manufacturer's agreement has different terms and
conditions, the agreements generally provide that the manufacturer will
provide a supply of chassis to be maintained from time to time at the
Company's various production facilities under the conditions that the
Company will store such chassis and will not make any additions or
modifications to such chassis and will not move, sell or otherwise
dispose of such chassis, except under the terms of the agreement. The
manufacturer does not transfer the certificate of origin to the Company
and, accordingly, the Company accounts for the chassis as consigned
inventory belonging to the manufacturer. Under these agreements if the
chassis is not delivered to a customer within 90 days of delivery to the
Company, the Company is required to pay a finance charge on the chassis.
At December 31, 1996 and 1995, chassis inventory, accounted for as
consigned inventory to the Company by the manufacturers, aggregated
$20.6 million and $14.0 million, respectively. Typically, chassis
A-15
<PAGE>
Supreme Industries, Inc. And Subsidiaries
Notes to Consolidated Financial Statements, Concluded
I. COMMITMENTS AND CONTINGENCIES, Concluded.
are converted and delivered to customers within 90 days of the receipt
of the chassis by the Company.
Self-Insurance
The Company is self-insured for a portion of product liability ($100,000
per occurrence with an annual aggregate of $500,000), certain employee
health benefits ($75,000 annually per employee with an annual aggregate
of approximately $2,000,000) and workers' compensation in certain states
($250,000 per occurrence with an annual aggregate of approximately
$5,000,000). The Company accrues for the estimated losses occurring from
both asserted and unasserted claims. The estimate of the liability for
unasserted claims arising from incurred but not reported claims is based
on an analysis of historical claims data.
Other
The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to
various uncertainties, and it is possible that some of these matters may
be resolved unfavorably to the Company. The Company has established
accruals for matters that are probable and reasonably estimable.
Management believes that any liability that may ultimately result from
the resolution of these matters in excess of accruals and or amounts
provided by insurance coverage will not have a material adverse effect on
the consolidated financial position or results of operation of the
Company.
A-16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Stockholders and
Board of Directors of
Supreme Industries, Inc.
Our report on the consolidated financial statements of Supreme Industries,
Inc. and subsidiaries is included on page A-1 of this Form 10-K. In
connection with our audits of such consolidated financial statements, we have
also audited the related financial statement schedule listed in Item 14(a)(2)
of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
South Bend, Indiana
January 24, 1997
S-2
<PAGE>
SUPREME INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Column B Column C
Balance At Charged Column E
Column A Beginning To Costs Column D Balance At
Description Of Period And Expenses Deductions End of Period
Year Ended December 31,
1996:
Reserves and
allowances
deducted from
asset accounts:
Allowance for
doubtful
receivables: $ 555,000 $ 184,000 $ 184,000 (1) $ 555,000 (2)
Year Ended December 31,
1995:
Reserves and
allowances
deducted from
asset accounts:
Allowance for
doubtful
receivables: $ 630,000 $ 318,000 $ 393,000 (1) $ 555,000 (2)
Year Ended December 31,
1994:
Reserves and
allowances
deducted from
asset accounts:
Allowance for
doubtful
receivables: $ 630,000 $ 447,000 $ 447,000 (1) $ 630,000 (3)
(1) Uncollectible accounts written off, net of recoveries.
(2) Reflected in the consolidated balance sheet as follows:
deducted from accounts receivable - $430,000 and deducted from other
assets ($125,000 note receivable from Contempri Homes, Inc.) - $125,000.
(3) Reflected in the consolidated balance sheet as follows:
deducted from accounts receivable - $430,000 and deducted from other
assets ($1 million note receivable from Contempri Homes, Inc.) -
$200,000.
S-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorize.
SUPREME INDUSTRIES, INC.
Date: March 15, 1997 By: /s/Herbert M. Gardner
Herbert M. Gardner, Chairman
of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in capacities and on the dates indicated.
/s/Herbert M. Gardner Chairman of the Board March 15, 1997
Herbert M. Gardner and President (Principal
Executive Officer)
/s/Omer G. Kropf Executive Vice President March 15, 1997
Omer G. Kropf and Director
/s/William J. Barrett Secretary, Assistant March 15, 1997
William J. Barrett Treasurer and Director
/s/Robert W. Wilson Executive Vice President March 15, 1997
Robert W. Wilson Treasurer, Chief Financial
Officer and Director
(Principal Financial and
Accounting Officer)
/s/Robert J. Campbell Director March 15, 1997
Robert J. Campbell
/s/Thomas Cantwell Director March 15, 1997
Thomas Cantwell
/s/Rice M. Tilley, Jr. Assistant Secretary March 15, 1997
Rice M. Tilley, Jr.
/s/H. Douglas Schrock Director March 15, 1997
H. Douglas Schrock
/s/Rick L. Horn Director March 15, 1997
Rick L. Horn
<PAGE>
INDEX TO EXHIBITS
Exhibit Description
3.1 Certificate of Incorporation of the Company, filed as Exhibit 3(a)
to the Company's Registration Statement on Form 8-A, filed with the
Commission on September 18, 1989, and incorporated herein by
reference.
3.2 Certificate of Amendment of Certificate of Incorporation of the
Company filed with the Secretary of State of Delaware on June 10,
1993 filed as Exhibit 3.2 to the Company's annual report on Form 10-K
for the fiscal year ended December 31, 1993, and incorporated herein
by reference.
3.3 Certificate of Amendment of Certificate of Incorporation of the
Company filed with the Secretary of State of Delaware on May 29, 1996.
3.4 Bylaws of the Company, filed as Exhibit 3(b) to the Company's
Registration Statement on Form 8-A, filed with the Commission on
September 18, 1989, and incorporated herein by reference.
4.1 Credit Agreement dated as of April 25, 1994, between the Company,
Supreme Corporation, and NBD Bank and signed in connection with
certain long-term indebtedness, filed as Exhibit 4.25 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1994, and incorporated herein by reference.
4.2 First Amendment to Credit Agreement dated April 25, 1994.
4.3 Second Amendment to Credit Agreement dated April 25, 1994.
10.1 The Company's 1992 Stock Option Plan, filed as Exhibit 10.7 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1992, and incorporated herein by reference.
<PAGE>
10.2 Form of Stock Option grant agreement used to evidence options granted
under the Company's 1992 Stock Option Plan, filed as Exhibit 10.8 to
the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1992, and incorporated herein by reference.
10.3 Inventory Loan and Security Agreement dated October 12, 1988, among
General Motors Acceptance Corporation and the Company, its
subsidiaries, and certain subsidiaries of Supreme Corporation, filed
as Exhibit 10.19 to the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1988, and incorporated herein by
reference.
10.4 Form of Demand Promissory Note dated September 28, 1988, from the
Company, and relating to the Agreement described 10.3 above, filed as
Exhibit 10.20 to the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1988, and incorporated herein by
reference.
10.5 Intercreditor Agreement dated as of December 31, 1991, among General
Motors Acceptance Corporation and Congress Financial Corporation, and
relating to the Agreement described in 10.3 above filed as Exhibit
10.14 to the Company's annual report on Form 10-K for the fiscal year
ended December 31, 1991, and incorporated herein by reference.
10.6 Pool Company Wholesale Finance Plan Application for Wholesale
Financing and Security Agreements, dated December 5, 1990, among Ford
Motor Credit Company and each of Supreme Corporation, Supreme Truck
Bodies of California, Inc., Supreme Corporation of Texas, and Supreme
Mid-Atlantic Corporation, filed as Exhibit 10.15 to the Company's
annual report on Form 10-K for the fiscal year ended December 31,
1991, and incorporated herein by reference.
10.7 Lease dated July 25, 1988, between Supreme Corporation and G-2, Ltd.,
a Texas limited partnership, relating to Supreme Corporation's
Goshen, Indiana facilities, filed as exhibit 10.22 to the Company's
annual report on Form 10-K for the fiscal year ended December 31,
1988, and incorporated herein by reference.
10.8 Lease dated July 25, 1988, between Supreme Corporation and G-2, Ltd.,
a Texas limited partnership, relating to Supreme Corporation's
Griffin, Georgia facilities, filed as Exhibit 10.23 to the Company's
annual report on Form 10-K for the fiscal year ended December 31,
1988, and incorporated herein by reference.
<PAGE>
10.9 Lease dated August 27, 1990, between Supreme Truck Bodies of
California, Inc. and Edgar Maas, individually and as Trustee of the
Marsha Maas Testamentary Trust, relating to Supreme Corporation's
Riverside, California facility, filed as Exhibit 10.19 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1991, and incorporated herein by reference.
10.10 License Agreement dated to be effective November 5, 1992, between
Supreme Corporation as licensee and ACCGRUPPENAB, a Swedish
Corporation, as licensor, with respect to certain know-how and patent
rights, filed as exhibit 10.19 to the Company's annual report on Form
10-K for the fiscal year ended December 31, 1993, and incorporated
herein by reference.
10.11 Employment Contract dated to be effective May 1, 1993, between
Supreme Corporation and Omer G. Kropf filed, as Exhibit 10.20 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
10.12 Consulting Agreement dated to be effective January 1, 1993, between
the Company and William J. Barrett, filed as Exhibit 10.21 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
10.13 Consulting Agreement dated to be effective January 1, 1993, between
the Company and Herbert M. Gardner, filed as Exhibit 10.22 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
10.14 Consulting Agreement dated to be effective April 15, 1993, between
the Company and Rice M. Tilley, Jr., filed as Exhibit 10.23 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
10.15 Consulting Agreement dated to be effective April 15, 1993, between
the Company and H. Douglas Schrock, filed as Exhibit 10.24 to the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1993, and incorporated herein by reference.
<PAGE>
10.16 Employment Contract dated to be effective October 1, 1994, between
Supreme Corporation and Robert W. Wilson, filed as Exhibit 10.24 to
the Company's annual report on Form 10-K for the fiscal year ended
December 31, 1994, and incorporated herein by reference.
11.1 Statement regarding computation of per share earnings.
21.1 Subsidiaries of the Company.
23.1 Consent of Independent Accountants.
<PAGE>
Exhibit 3.3
Certificate of Amendment
of
Certificate of Incorporation
of
Supreme Industries, Inc.
SUPREME INDUSTRIES, INC. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
1. That at a duly called and held meeting of the Board of Directors of
the Corporation a resolution was duly adopted setting forth the proposed
amendment to the certificate of Incorporation of the Corporation to increase
the authorized number of shares of the Corporation's Class A Common Stock,
$.10 par value, from 15,000,000 shares to 20,000,000 shares, declaring said
amendment to be advisable and directing the amendment be considered at the
next annual meeting of stockholders. The resolution setting forth the
proposed amendment is as follows:
RESOLVED, that the certificate of Incorporation of the Corporation be amended
by changing the first sentence of Article 4.a. thereof so that, as amended,
the first sentence of said Article shall be and read as follows:
"4.a. Class A Common Stock. The aggregate number of shares of Class A
Common Stock which the Corporation may issue is 20,000,000 shares with a par
value of $.10."
2. That thereafter, pursuant to resolution of its Board of Directors, the
annual meeting of the stockholders of the Corporation was duly called and
held on May 2, 1996, upon notice and in accordance with section 222 of the
General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares as required by statute were voted in favor of
said amendment.
3. That said amendment was duly adopted in accordance with the provisions
of section 242 of the General Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this certificate of Amendment
to be signed by Mr. Herbert M. Gardner, its Chairman of the Board and
President, and attested by Mr. William J. Barrett, its Secretary, this 28th
day of May, 1996.
SUPREME INDUSTRIES, INC.
By: /s/Herbert M. Gardner
Herbert M. Gardner,
Chairman of the Board and President
ATTEST:
By: /s/William J. Barrett
William J. Barrett,
Secretary
<PAGE>
Exhibit 4.2
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT, dated as of February 20, 1996 (this
"Amendment"), is among SUPREME INDUSTRIES, INC., a Delaware corporation
("SI") and SUPREME CORPORATION, a Texas corporation ("SC" and together with
SI referred to collectively as the "Borrowers" and each individually as a
"Borrower") and NBD BANK, and Indiana banking corporation (the "Bank").
RECITALS
A. The Borrowers and the Bank are parties to a Credit Agreement, dated as
of April 25, 1994, (as now and hereafter amended, the "Credit Agreement"),
pursuant to which the Bank agreed, subject to the terms and conditions
thereof, to extend credit to the Borrowers.
B. The Borrowers desire to amend the Credit Agreement and the Bank is
willing to do so strictly in accordance with the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1 The paragraph after "Introduction" shall be amended by deleting the
reference to "$12,000,000" and inserting the following in place thereof:
"$14,000,000, increasing to $20,000,000 during the period each year from
February 1 through June 30".
1.2 Section 1.1 shall be amended as follows:
(a) The definition of "Applicable Margin" shall be amended by
deleting all references therein to "2.5 to 1.0" and inserting "2.15 to 1.0"
in place thereof.
(b) The definition of "Borrowing Base" shall be amended by
deleting clause (A)(a)(ii) in its entirety and inserting the following in
place thereof: "(ii) an amount equal to 40% of the value of Eligible
Inventory which constitutes raw materials and finished goods,".
<PAGE>
(c) The definition of "Commitment" shall be deleted in its
entirety and the following shall be inserted in place thereof:
"Commitment" shall mean the commitment of the Bank to make
Loans and Letter of Credit Advances pursuant to Section 2.1 in amount not
exceeding an aggregate principal amount outstanding at any time of
$19,000,000 (increasing to $25,000,000 during certain periods hereinafter
described), comprised of $5,000,000 in the case of the Term Loan and, in the
case of the Revolving Credit Loans, $14,000,000, increasing to $20,000,000
during the period each year from and including February 1 to and including
June 30, as such amount may be reduced from time to time pursuant to
Section 2.2.
(d) The definition of "Termination Date" shall be amended by
deleting the reference in clause (a) to "April 30, 1997" and inserting
"April 30, 1999" in place thereof.
1.3 Section 2.1(a) shall be amended by deleting the reference in the last
line to "$1,000,000" and inserting "$5,000,000" in place thereof.
1.4 Section 5.1(d)(ii) shall be amended by adding "and consolidation"
after each reference to "consolidated" contained therein.
1.5 Section 5.2(b), (c), (d) and (e) shall be deleted in their entirety
and the following shall be inserted in place thereof:
(b) Working Capital. Permit or suffer the Consolidated Working
Capital of the Borrower and its Subsidiaries to be less than $8,000,000 as of
the end of any fiscal quarter of the Borrower, commencing with the fiscal
quarter ending December 31, 1995.
(c) Tangible Capital Funds. Permit or suffer Consolidated
Tangible Capital Funds of the Borrower and its Subsidiaries to be less than
the sum of (i) $22,000,000 plus(ii) an amount equal to 50% of Cumulative Net
Income of the Borrower and its Subsidiaries for each fiscal year of the
Borrower commencing with the fiscal year ending December 31, 1996, as of the
end of any fiscal quarter of the Borrower, commencing with the fiscal quarter
ending December 31, 1995.
(d) Total Liabilities to Tangible Capital Funds. Permit or
suffer the ratio of Consolidated Total Liabilities of the Borrower and its
Subsidiaries to Consolidated Tangible Capital Funds of the Borrower and its
Subsidiaries to be greater than 2.15 to 1.00 as of the end of any fiscal
quarter of the Borrower, commencing with the fiscal quarter ending
December 31, 1995.
(e) Debt Coverage Ratio. Permit or suffer the ratio of
Consolidated Debt coverage Ratio of the Borrower and its Subsidiaries to be
less than 2.0 to 1.00 as of the end of any fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 1995.
<PAGE>
1.6 The form of Revolving Credit Note attached as exhibit A-1 shall be
substituted and replaced with the form of Revolving Credit Note attached
hereto (the "New Revolving Credit Note").
ARTICLE II. REPRESENTATIONS. Each Borrower represents and warrants to the
Bank that:
2.1 The execution, delivery and performance of this Amendment and the New
Revolving Credit Note are within its powers, have been duly authorized and
are not in contravention with any law, of the terms of its Articles of
Incorporation or By-laws, or any undertaking to which it is a party or by
which it is bound.
2.2 This Amendment is and the New Revolving Credit Note when issued
hereunder will be, the legal, valid and binding obligations of the Company
enforceable against it in accordance with the terms thereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Credit
Agreement are true on and as of the date hereof with the same force and
effect as if made on and as of the date hereof.
2.4 No Event of Default or any event or condition which might become an
Event of Default with notice or lapse of time, or both, exists or has
occurred and is continuing on the date hereof.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become
effective until each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrowers and the Bank.
3.2 The New Revolving Credit note shall be signed and delivered by the
borrowers to the Bank.
3.3 Each of the Guarantors shall have executed the Consent and Agreement
at the end of this Amendment.
3.4 Atlantic Sales Corporation, a Texas corporation, and Supreme/Murphy
Truck Bodies, Inc., a North Carolina corporation, shall each execute and
deliver a Guaranty and a Security agreement, together with all other items
required to be delivered by a "Guarantor" pursuant to Section 2.5 of the
Credit Agreement.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Credit Agreement or in any note, certificate,
instrument or other document to the "Credit Agreement" shall be deemed to be
references to the Credit Agreement as amended hereby and as further amended
from time to time.
<PAGE>
4.2 The Borrowers agree to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Bank in connection with
preparing this Amendment and the related Documents.
4.3 Each Borrower acknowledges and agrees that the Bank has fully
performed all of their obligations under all documents executed in connection
with the Credit Agreement and all actions taken by the Bank are reasonable
and appropriate under the circumstances and within their rights under the
Credit Agreement and all other documents executed in connection therewith and
otherwise available. Each Borrower represents and warrants that it is not
aware of any claims or causes of action against the Bank, any participant
lender or any of their successors or assigns.
4.4 Except as expressly amended hereby, each Borrower agrees that the
Credit Agreement, the Notes, the Security Documents and all other documents
and agreements executed by the Company in connection with the Credit
Agreement in favor of the Bank are ratified and confirmed and shall remain in
full force and effect and that it has no set off, counterclaim or defense
with respect to any of the foregoing. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
4.5 This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of February 20, 1996.
SUPREME INDUSTRIES, INC.
By: /s/Robert W. Wilson
Its: Executive Vice President , CFO
SUPREME CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance
NBD BANK
By: /s/Christopher Wolfe
Its: Vice President
<PAGE>
CONSENT AND AGREEMENT
As of the date and year first above written, each of the undersigned hereby:
(a) fully consents to the terms and provisions of the above Amendment and
the consummation of the transactions contemplated hereby and agrees to all
terms and provisions of the above Amendment applicable to it;
(b) agrees that each Guaranty and all other agreements executed by any of
the undersigned in connection with the Credit agreement or otherwise in favor
of the Bank (collectively, the "Security Documents") are hereby ratified and
confirmed and shall remain in full force and effect, and each of the
undersigned acknowledges that it has no setoff, counterclaim or defense with
respect to any security document; and
(c) acknowledges that its consent and agreement hereto is a condition to
the Bank's obligation under this Amendment and it is in its interest and to
its financial benefit to execute this consent and agreement.
SUPREME CORPORATION OF TEXAS
By: /s/Robert W. Wilson
Its: Vice President of Finance
SUPREME TRUCK BODIES OF
CALIFORNIA, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance
SUPREME MID-ATLANTIC CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance
<PAGE>
ROUSE WELDING & BODY CO., INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance
ATLANTIC SALES CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance
SUPREME/MURPHY TRUCK BODIES, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance
<PAGE>
Exhibit 4.3
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of October 25, 1996 (this
"Amendment"), is among SUPREME INDUSTRIES, INC., a Delaware corporation
("SI") and SUPREME CORPORATION, a Texas corporation ("SC" and together with
SI referred to collectively as the "Borrowers" and each individually as a
"Borrower") and NBD BANK, an Indiana banking corporation (the "Bank").
RECITALS
A. The Borrowers and the Bank are parties to a Credit Agreement, dated as
of April 25, 1994, as amended by a first Amendment to Credit Agreement dated
as of February 20, 1996 (as now and hereafter amended, the "Credit
Agreement"), pursuant to which the Bank agreed, subject to the terms and
conditions thereof, to extend credit to the Borrowers.
B. The Borrowers desire to amend the Credit Agreement and the Bank is
willing to do so strictly in accordance with the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1 Section 1.1 shall be amended as follows:
(a) The following definitions shall be deleted in their entirety,
together with all references to such defined terms contained in the Credit
Agreement: Borrowing Base, Borrowing Base Certificate, Eligible Accounts
Receivable, Eligible Inventory and Security Agreement.
(b) The definition of "Applicable Margin" shall be deleted in its
entirety and the following shall be inserted in place thereof:
"Applicable Margin" shall mean with respect to Eurodollar
Rate Loans, one and one-quarter percent (1.25% per annum, and with respect to
Floating Rate Loans, zero percent (0%) per annum.
<PAGE>
(c) The definition of "Guarantors" shall be deleted and the
following shall be inserted in place thereof:
"Guarantors" shall mean Supreme Corporation of Texas, Supreme
Truck Bodies of California, Inc., Supreme Mid-Atlantic Corporation, Atlantic
Sales Corporation, Supreme/Murphy Truck Bodies, Inc., SC Freedom One, Inc.
and SC Tower Structural Laminating, Inc. and each other person otherwise
entering into a Guarantee from time to time, and "Guarantor" shall mean any
one of the Guarantors.
(d) The definition of "Security documents" shall be amended by
deleting the reference therein to, "the Security Agreement".
1.2 Section 2.1(a) shall be amended by deleting the following language:
"the lesser of (a) the amount of the Borrowing Base as of the close of
business on the last day of the month next preceding the date any such
Advance is made and (b)".
1.3 Section 2.6(c) shall be deleted in its entirety.
1.4 Section 2.10 shall be deleted in its entirety and the following shall
be inserted in place thereof:
2.10 Guarantees. To guaranty payment when due of the Revolving
Credit Note, the Term Note and all other obligations of the Borrower under
this Agreement to the Bank, the Borrower shall cause the Guarantors to
execute and deliver the Guarantees to the Bank.
1.5 Section 3.1(c) shall be deleted in its entirety and the following
shall be inserted in place thereof: "[Intentionally Reserved]".
1.6 Sections 5.1(d)(iv) and (vii) shall be deleted in their entirety and
the following shall be inserted in place thereof: "[Intentionally Reserved]".
1.7 Rouse Welding & Body Co., Inc. ("Rouse") and certain other Guarantors
named therein executed and delivered a Guarantee Agreement dated as of
April 24, 1994 to the Bank. The Bank hereby releases Rouse from any and all
obligations and liabilities under such Guarantee; provided, that, such
Guarantee shall remain fully binding and enforceable against the other
Guarantors party thereto.
1.8 Each Borrower and Guarantor (other than the Guarantors referred to in
section 3.3 hereof) executed and delivered to the Bank a Security Agreement
dated as of April 25, 1994, as amended by a First Amendment to Security
Agreement dated as of February 20, 1996. The Bank hereby releases each
Borrower and each Guarantor from any and all obligations and liabilities under
the Security Agreement and all financing statements delivered in connection
therewith and the Bank agrees to promptly terminate all financing statements
filed by the Bank to perfect the liens granted to the Bank pursuant to the
Security Agreement.
<PAGE>
ARTICAL II. REPRESENTATIONS. Each Borrower represents and warrants to the
Bank that:
2.1 The execution, delivery and performance of this Amendment are within
its powers, have been duly authorized and are not in contravention with any
law, of the terms of its Articles of Incorporation or By-laws, or any
undertaking to which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation of the
Company enforceable against it in accordance with the terms thereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Credit
Agreement are true on and as of the date hereof with the same force and
effect as if made on and as of the date hereof.
2.4 No Event of Default or any event or condition which might become an
event of Default with notice or lapse of time, or both, exists or has
occurred and is continuing on the date hereof.
ARTICLE III. CONDITION OF EFFECTIVENESS. This Amendment shall not become
effective until each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrowers and the Bank.
3.2 Each of the Guarantors shall have executed the Consent and Agreement
at the end of this Amendment.
3.3 SC Freedom One, Inc. and SC Tower Structural Laminating, Inc. shall
each execute and deliver a Guaranty and a Security Agreement, together with
all other items required to be delivered by a "Guarantor" pursuant to section
2.5 of the Credit agreement, other than a Security Agreement.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Credit Agreement or in any note, certificate,
instrument or other document to the "Credit Agreement" shall be deemed to be
references to the Credit Agreement as amended hereby and as further amended
from time to time.
4.2 The Borrowers agree to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Bank in connection with
preparing this Amendment and the related documents.
<PAGE>
4.3 Each Borrower acknowledges and agrees that the Bank has fully
performed all of their obligations under all documents executed in connection
with the Credit Agreement and all actions taken by the Bank are reasonable
and appropriate under the circumstances and within their rights under the
Credit Agreement and all other documents executed in connection therewith and
otherwise available. Each Borrower represents and warrants that it is not
aware of any claims or causes of action against the Bank, any participant
lender or any of their successors or assigns.
4.4 Except as expressly amended hereby, each Borrower agrees that the
Credit Agreement, the Notes, the Security Documents and all other documents
and agreements executed by the Company in connection with the Credit
Agreement in favor of the Bank are ratified and confirmed and shall remain in
full force and effect and that it has no set off, counterclaim or defense
with respect to any of the foregoing. Terms used but not defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
4.5 This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties signing this amendment have caused this
Amendment to be executed and delivered as of October 25, 1996.
SUPREME INDUSTRIES, INC.
By: /s/Robert W. Wilson
Its: Executive Vice President , CFO
SUPREME CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
NBD BANK
By: /s/Daniel Oakley
Its: Vice President
<PAGE>
CONSENT AND AGREEMENT
As of the date and year first above written, each of the undersigned hereby:
(a) fully consents to the terms and provisions of the above Amendment and
the consummation of the transactions contemplated hereby and agrees to all
terms and provisions of the above Amendment applicable to it;
(b) agrees that each Guaranty and all other agreements executed by any of
the undersigned in conncetion with the Credit Agreement or otherwise in favor
of the Bank (collectively, the "Security Documents") are hereby ratified and
confirmed and shall remain in full force and effect, and each of the
undersigned acknowledges that it has no setoff, counterclaim or defense with
respect to any Security Document; and
(c) acknowledges that its consent and agreement hereto is a condition to
the bank's obligation under this Amendment and it is in its interest and to
its financial benefit to execute this consent and agreement.
SUPREME CORPORATION OF TEXAS
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
SUPREME TRUCK BODIES OF
CALIFORNIA, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
SUPREME MID-ATLANTIC CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
<PAGE>
ATLANTIC SALES CORPORATION
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
SUPREME/MURPHY TRUCK BODIES, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
SC FREEDOM ONE, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
SC TOWER STRUCTURAL LAMINATING, INC.
By: /s/Robert W. Wilson
Its: Vice President of Finance/
Asst. Sec.
<PAGE>
EXHIBIT 11.1 -- STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
SUPREME INDUSTRIES, INC. AND SUBSIDIARIES
(Amounts in thousands, except per share data)
Years Ended December 31,
1996 1995 1994
PRIMARY
Average shares outstanding 8,525 8,160 7,978
Net effect of dilutive stock
options and warrants - based
on the treasury stock method
using average market price 623 420 165
Dilutive effect of subordinated
convertible notes 161 14 -
TOTAL 9,309 8,594 8,143
Net income $ 5,087 $ 7,240 $ 5,473
Earnings per share $ .55 $ .84 $ .67
FULLY DILUTED
Average shares outstanding 8,525 8,160 7,978
Net effect of dilutive stock
options and warrants - based
on the treasury stock method
using the period-end market
price, if higher than the
average market price 623 490 166
Dilutive effect of subordinated
convertible notes 263 611 612
TOTAL 9,411 9,261 8,756
Net income $ 5,087 $ 7,240 $ 5,473
Interest expense reduction due to
assumed conversion of
subordinated convertible notes -
net of tax 23 131 127
Net income as adjusted $ 5,110 $ 7,371 $ 5,600
Earnings per share $ .54 $ .80 $ .64
<PAGE>
Ehibit 21.1
Subsidiaries of the Company
Supreme Corporation
Supreme Corporation of Texas, a Texas Corporation
Supreme Truck Bodies of California, Inc., a California Corporation
Supreme Mid-Atlantic Corporation, a Texas Corporation
Supreme/Murphy Truck Bodies, Inc., a North Carolina Corporation
Rouse Welding and Body Company, Inc., a Texas Corporation
Atlantic Sales Corporation, a Texas Corporation
Atlantic Wood Products, S.A.
PA Land Holding Corp., a Texas Corporation
SC Freedom One, Inc.
SC Tower Structural Laminating, Inc.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Supreme Industries, Inc. (formerly ESI Industries, Inc.) on Form S-8 (File
No. 33-64047) and on Form S-3 (File Nos. 33-59586; 33-49488 and 33-59343) and
in the related Prospectus of our reports dated January 24, 1997, on our
audits of the consolidated financial statements and financial statement
schedule of Supreme Industries, Inc. and subsidiaries as of December 31, 1996
and 1995, and for each of the three years in the period ended December 31,
1996 which reports are included in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
South Bend, Indiana
March 19, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 220,678
<SECURITIES> 0
<RECEIVABLES> 16,556,258
<ALLOWANCES> 430,000
<INVENTORY> 21,208,707
<CURRENT-ASSETS> 39,451,946
<PP&E> 40,675,873
<DEPRECIATION> 14,246,236
<TOTAL-ASSETS> 68,829,024
<CURRENT-LIABILITIES> 16,008,452
<BONDS> 16,108,780
<COMMON> 941,574
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 68,829,024
<SALES> 159,876,108
<TOTAL-REVENUES> 159,876,108
<CGS> 134,153,108
<TOTAL-COSTS> 134,153,108
<OTHER-EXPENSES> 15,434,432
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,530,624
<INCOME-PRETAX> 8,757,944
<INCOME-TAX> 3,671,000
<INCOME-CONTINUING> 5,086,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,086,944
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.54
</TABLE>
