Supreme Industries interim CEO discusses leadership change and planned expansion during first quarter conference call
GOSHEN — Supreme Industries Inc. discussed the recent change in leadership at the company and the planned expansion at the Goshen facility but gave few details during a conference call Friday with investors.
In March, Kim Korth stepped down as director, president and CEO of Supreme to return to her consulting business, IRN Inc., full time. Matthew Long, chief financial officer, was named interim chief executive officer.
Talking to investors, Long sought to reassure Wall Street the exit of one executive would not hurt the company.
“Supreme’s turnaround has been driven by improving market conditions and the efforts of all employees throughout the organization,” Long said. “While one member of the executive team has departed, all other key members remain on board. These individuals have actively guided the company through a difficult transition period and remain committed to ongoing improvement in Supreme’s financial performance.”
Headquartered in Goshen, Supreme manufactures truck bodies as well as buses and armored vehicles for industrial, commercial and law enforcement customers. The company has nearly 1,900 employees in operations across the United States, including Georgia, Texas and California.
The company ended the first quarter of 2012 with net sales of $72.5 million and a net income of $2.5 million, an improvement from the net sales of $68.4 million and a net loss of $1.4 million in the opening quarter of 2011.
“Looking ahead to the balance of the year, we continue to invest in improving our core offerings while decreasing costs as well as new product development,” Long said. “Although we are nowhere near the heated dynamics of the mid-2000s, we believe overall truck conditions are expected to demonstrate continued improvement. Demand for certain units such as department of state vehicles are stabilizing and bus remains very price competitive fueled by state and municipal contracts.”
Net sales for 2011 reached $300.8 million after falling to $186.1 million in 2009, then climbing to $220.9 million in 2010.
Also in 2011, income entered into positive territory for the first time since 2007. The company reported an income from continuing operations of $1.6 million last year while losses of $8.6 million and $5.7 million were posted in 2010 and 2009, respectively.
“In closing, we believe we have created a blueprint for sustaining the momentum of continuous improvement in our core businesses,” Long said. “While much work remains to be done, we believe the results speak for themselves demonstrating a stable business built on a solid foundation.”
Long also told investors the Goshen operation was awarded tax incentives by the city council and the state of Indiana to assist with a nearly $7 million upgrade in facilities and equipment over the next three years.
The goal, he said, is to modernize the truck manufacturing plant by streamlining and improving the flow of the products. Also, a number of operations that are on the campus but remote will be moved into one building to help with the process. Then similar building consolidations will happen for other operations.
“That will allow us to increase our capacity which we believe will then provide us the ability to increase employment and throughput,” Long said.
Korth had held a seat on Supreme’s board of directors before being named interim president and CEO in February 2011. She became CEO seven months later.
At the same time she was leading Supreme, Korth was president of IRN, a consulting firm that focuses on suppliers in the transportation equipment markets.
The manufacturer employed the services of IRN in 2010 and continued to do so the following year, according to Supreme’s 2011 annual report filed with the U.S. Securities and Exchange Commission. During 2011, the company paid IRN about $389,000, including $288,000 after Korth was hired by Supreme in February.
Additional services from IRN were utilized through Feb. 3, 2012, at a cost of $34,000. Then the services of IRN were terminated.
In response to a question about the status of the search, Long did not name a specific time as to when a new CEO would be identified.
“Well, finding the right person certainly we can’t predict that, but we do have a process in place,” he said. “The search is started in earnest. So we hope we’ll find that permanent replacement as soon as practical.”