Truck body maker Supreme Industries took a hit on its bottom line in both the second quarter and for the first half of the year as sales slumped due to the economic recession.
Net sales for the second quarter this year declined 34% to $49.6 million compared to $75.3 million in the same period in 2008. For the first half of 2009, net sales declined 35% to $98.9 million, versus $151.2 million over the first six months of 2008.
Sales declines for both periods were attributable primarily to lingering recessionary conditions and restrictive credit markets, noted Robert Wilson, Supreme’s president & COO. “Aggressive efforts to reduce costs have mitigated the impact of the unprecedented downturn in the commercial vehicle market,” he said in the company’s mid-year earnings report. “On a sequential basis, we generated improvement in gross margin, and narrowed our operating losses by 49%, on relatively flat revenues, versus the first quarter of the year.”
That wasn’t enough to prevent a net loss of $1.1 million in the second quarter, versus profits of $200,000 in the same period in 2008, while over the first half of 2009 the company lost $2.5 million, compared to net income of $400,000 million by the midpoint of 2008.
Still, Wilson noted that there are bright spots in the truck body business. "Compared with last year’s second quarter, sales in Supreme’s core dry-freight and bus product lines were off 49% and 14%, respectively. However, our armored vehicle division posted a 351% sales increase versus the same period in 2008,” he stressed. “Net sales declines for the first half of 2009 were comparable with the quarterly results, with dry-freight and buses decreasing 47% and 20%, respectively, while armored increased 221% versus the first six months of 2008."
Wilson said Supreme is benefitting particularly from U.S. Dept. of State business for its armored vehicle products – a segment that continues to be a performance standout as revenues in armored for the second quarter and first half grew $3.4 million and $7.2 million, respectively, compared to 2008.
"Going forward, we expect the armored division production will continue to remain steady for the balance of 2009," he said. "Our bus division is also expected to continue to show sequential improvement in the second half of 2009. Both businesses are healthy and backlogs are strong, which will aid in partially offsetting the depressed dry-freight truck body business."