Supreme Industries, Inc. (NYSE: STS), a leading manufacturer of truck bodies, buses, armored vehicles, and specialty vehicles announced that its Board of Directors have appointed Mark D. Weber as the company’s President and Chief Executive Officer starting May 6, 2013.
Mr. Weber has solid experience having served as an executive at Federal Signal Corporation (NYSE: FSS), a global manufacturer of environmental and safety solutions. Since 2003, he has served as the Group President responsible for five divisions with revenues in excess of $500 million. During his stay at Federal Signal, he was responsible for massive restructuring and divesture of non-core assets. This led to a significant increase in revenues for the company. Prior to joining Federal Signal, Mr. Weber spent 17 years at Cummins Inc (NYSE: CMI) where he served in various operations management and new product development roles.
The appointment of Mr. Weber was timely, noting the decline in the topline growth of the company in the recent first quarter 2013 financial results. During the period, consolidated sales amounted to $65.9 million, a decline of 8.7% from the previous year. The truck division, which accounted for 76% of the total sales, posted higher sales in the quarter. This is despite the overall industry-wide slowdown experienced during the period. However, bus sales declined to $7.4 million from competitive pressures and discounting incentives on state and municipal orders.
Despite the decline, gross profit reached $11.4 million, an increase from the previous year’s $10.8 million. The favorable increase in gross profit is attributed to efficiency measures, pricing adjustments and good product mix. This translated to pre-tax net income of $3.4 million, an increase of 37% compared to the same period last year.
Going forward, the company is expected to increase its profitability with Mr. Weber as Supreme’s top honcho. CEO Mark Weber brings strong market perspective, which will lead to a high level of customer focus and strong commitment to developing talents.
Analysts forecast earnings per share of $0.78 for the year. This is an increase of 6.80% compared to the same period last year. There is no forecast earnings growth for the next five years. However, the company posted earnings per share decline of 40% for the last five years. Notable is the industry’s forecast earnings per share of 16%, which is more likely the company’s expected growth rate for the period.
The stock trades at 7 times earnings and 1.19 times book value. Over the last five years, the stock has traded between 5 times earnings and 24 times earnings. In contrast, Oshkosh Corporation (NYSE: OSK) is valued at 12 times earnings and 1.79 times book value. Also, Federal Signal has valuation of 3.78 times book value. However, Supreme Industries’ main catalyst will be the hiring of its new CEO. This will ultimately lead to better investor confidence and possible share price appreciation.