Supreme Announces Litigation Settlement
Supreme Announces Litigation Settlement
GOSHEN, Ind.--(BUSINESS WIRE)-- Supreme Industries, Inc. (NYSE MKT: STS), a leading manufacturer of specialized commercial vehicles including truck bodies, shuttle buses and armored vehicles, today announced that its it has reached a settlement regarding the previously disclosed litigation with King County, Washington.
On February 22, 2012, King County, Washington filed a complaint against a subsidiary of Supreme Industries, Inc. (the "Company") seeking to revoke the county's acceptance of a fleet of thirty five buses, which had been manufactured by the Company's subsidiary and delivered to King County beginning in 2009, and alleging breach of contract and breach of implied warranties. As of February 28, 2013, King County claimed its damages were then $10,594,113. The county subsequently moved to add a consumer protection act claim which would permit an award of attorney's fees, in addition to its damages, if successful.
On June 14, 2013, the Company's subsidiary and King County entered into a Settlement and Release Agreement under the terms of which the lawsuit will be dismissed and mutual releases granted in exchange for payment of the sum of $4,737,500 to the county within ninety days of the date of the agreement. Through separate agreements, the Company's subsidiary settled third-party claims against certain third-party subcontractors who will contribute to the Company's subsidiary $520,000 of the settlement funds, with the Company's subsidiary responsible for the balance which is intended to be paid by utilization of approximately 12% of the Company's $35,000,000 credit facility. The settlement, net of third party funds, is $4,217,500 or $2,867,900 net of tax. The Company will take possession of the fleet of buses from the county on or before July 9, 2013. The Company will look at ways to resell or repurpose the buses in a way that maximizes their value.
Mark D. Weber, President and Chief Executive Officer, commented, "In light of the risks and costs inherent in continuing this suit, the Company determined that it was in its interest to bring this matter to resolution. Supreme remains focused on providing products and services that meet customer expectations for the truck, armored vehicle, shuttle bus, mid-size bus, and trolley markets."
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About Supreme Industries
Supreme Industries, Inc. (NYSE MKT: STS) is a nationwide manufacturer of specialized truck bodies produced to the specifications of its customers. Supreme also manufactures the StarTrans® line of special-purpose "shuttle-type" buses. The Company's transportation equipment products are used by a wide variety of industrial, commercial, and law enforcement customers.
Other than historical facts contained herein, the matters set forth in this news release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, and reflect the view of management with respect to future events. When used in this report, words such as "believe," "expect," "anticipate," "estimate," "intend," "plan" and similar expressions, as they relate to Supreme or its plans or operations, identify forward-looking statements. Such forward-looking statements are based on assumptions made by, and information currently available to, management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that the expectations reflected in such forward-looking statements are reasonable, and it can give no assurance that such expectations will prove to be correct.Important factors that could cause actual results to differ materially from such expectations include, without limitation, an economic slowdown in the specialized vehicle industry, limitations on the availability of chassis on which Supreme's product is dependent, availability of raw materials, raw material cost increases and severe interest rate increases. Furthermore, Supreme can provide no assurance that any raw material cost increases can be passed on to its customers through implementation of price increases for Supreme's products. The forward-looking statements contained herein reflect the current view of management with respect to future events and are subject to those factors and other risks, uncertainties and assumptions relating to the operations, results of operations, cash flows and financial position of Supreme. Supreme assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those contemplated by such forward-looking statements.
For Supreme Industries, Inc.
Matthew J. Dennis, CFA, 574-228-4130
Supreme Investor Relations
KEYWORDS: United States North America Indiana Washington
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