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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 For the fiscal year ended December 31, 2001.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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, 16441 CR 38, Goshen, Indiana 46528
(Address of principal executive offices) (Zip Code)

(Registrant's telephone number, including area code) - (574) 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 March 4, 2002: $39,581,953

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 March 4, 2002
Class A Common Stock ($.10 Par Value) 8,878,317 shares
Class B Common Stock ($.10 Par Value) 1,917,394 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 May 1, 2002 Part III

The Index to Exhibits is on page in the sequential numbering system. Total pages

PART I

ITEM 1. BUSINESS.
History

Supreme Industries, Inc., a Delaware Corporation, (the "Company" or "Supreme") is one of the nation's leading manufacturers of specialized vehicles, including truck bodies and shuttle buses. The Company was incorporated in 1979 and originally had one operating subsidiary, TGC Industries, Inc., which was spun-off to stockholders of the Company effective July 31, 1986.

Supreme Corporation, the Company's wholly-owned operating subsidiary, was formed in January 1984 to acquire a company engaged in the business of manufacturing, selling and repairing specialized truck bodies, shuttle buses and related equipment.

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.

Financial Information About Operating Segments

The Company has two operating segments, specialized vehicles and vertically integrated fiberglass products. The vertically integrated fiberglass products segment does not meet the quantitative thresholds for separate disclosure.

General Description of the Company's Business

The specialized vehicle industry consists of companies that manufacture and/or distribute specialized truck bodies and shuttle buses. Depending on the product, it is either built directly on a truck chassis or built separately and installed at a later date. The truck chassis, which consists of an engine, frame with wheels, and in some cases a cab, is manufactured by third parties who are 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 $2,500 to $175,000. 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 the 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 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 pre painted 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® insulated van bodies. Chiller® 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® 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.

Iner-City® cutaway van bodies. Aluminum or FRP cutaway van bodies are manufactured on cutaway chassis which are available with access to the cargo area from the cab. The Iner-City® 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® 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.

Spartan mini-bodies. Spartan mini-bodies are produced in three different configurations and designed to be mounted on small trucks for diversified commercial use.

Armored Trucks. Supreme's armored trucks are built to customer specifications in either aluminum, galvaneal or stainless steel.

StarTrans® shuttle buses. The StarTrans® shuttle buses have seating capacities for 12 to 29 people and are offered with a variety of seating arrangements and with options such 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® mid-size buses. Supreme's StarTrans® mid-size buses (President and Ambassador) 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.

StarTrans® trolleys. Supreme's StarTrans® trolley line is similiar in size to the mid-size bus line but resembles a San Francisco trolley car. It is marketed to resort areas, theme parks and cities desiring unique transportation vehicles.

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 a broad range of agricultural transportation needs.

Chiller®, Kold King®, Nordica®, Iner-City®, Spartan, StarTrans®, and Fuel Shark are trademarks used by Supreme in its marketing of truck bodies and buses. Chiller®, Kold King®, Nordica®, Iner-City®, and StarTrans® are trademarks registered in the U.S. Patent and Trademark Office.

Some examples of specialized vehicles 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 vehicle. 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 and Ligonier, Indiana; Griffin, Georgia; Cleburne, Texas; Moreno Valley, California; Jonestown, Pennsylvania and Wilson, North Carolina. Supreme's management estimates that the capacity utilization of its plants and equipment range from 60% to 90% of capacity when annualized on a one-shift basis. At various times during the year, several of the Company's plants operate at 100% capacity to meet fleet requirements.

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 is more vertically integrated than many of its competitors. The Company manufactures its own fiberglass reinforced plywood, fiberglass parts, and has extensive roll forming and metal bending capabilities. A portion of the excess capacity of these fabrication capabilities is used to supply products to the recreational vehicle and marine industries.

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 generally does not purchase vehicle chassis for its inventory. Supreme accepts shipment of vehicle chassis owned by dealers or end-users, for the purpose of installing and/or manufacturing its specialized truck bodies and buses 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 chassis, Supreme's level of manufacturing could be substantially reduced. The Company has established relationships with all major chassis manufacturers and in the event of a disruption in supply from one manufacturer the Company would attempt to divert its demand to the other manufacturer. Approximately 30% 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 manu facturing 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. Supreme's operations could be affected by labor disruptions at its raw material suppliers or freight carriers. The single greatest threat to Supreme would be the disruption of chassis availability as virtually all of Supreme's products are built on chassis. The Company believes it enjoys good relationships with all the chassis manufacturers that supply the chassis that its products are built on. In the event of a problem with one chassis supplier the Company would attempt to divert its products to other chassis suppliers.

Marketing

Supreme normally sells the vehicle and/or equipment that has been installed on the 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 and distribution sites, gives Supreme a distinct marketing advantage over its competitors. Supreme generally delivers its products within 4 to 8 weeks after the receipt of orders.

Supreme markets products direct to end users in geographic areas where the Company does not have a strong distributor. The Company currently has distribution facilities in the areas of St. Louis, MO; Louisville, KY; Cleveland, OH; Orlando, FL; Houston and San Antonio, TX; Denver, CO; San Francisco, CA and Woonsocket, RI. The Company plans to open a new distribution facility near Columbus, OH in the spring of 2002.

Approximately 85 employees are engaged in direct sales. Supreme engages in direct advertising in trade publications, trade shows and cooperative advertising campaigns with distributors.

Competition

Specialized vehicles 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 manufacturing facilities and nine distribution centers. Chassis manufacturers have not generally shown an interest in manufacturing specialized vehicles, including truck bodies and shuttle buses, because such manufacturers' highly-automated assembly line operations do not lend themselves to the efficient production of a wide variety of highly specialized vehicles with various options 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 revolving line of credit to finance its accounts receivable and inventories. The Company's Credit Agreement requires the Company to maintain a minimum working capital of not less than $10 million. The Company had working capital of $29.4 million at December 31, 2001.

Major Customers

The Company had one customer, Budget Group Inc., that accounted for approximately 11% of the Company's revenues during 1999. No single or group of customers accounted for 10% or more of the Company's revenues for the years ended December 31, 2001 and 2000. 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, 2001, the Company employed approximately 1,800 employees, none of whom are represented by a collective bargaining unit. The Company considers its relations with its employees to be satisfactory.

Back Log

The Company's backlog of firm orders was $43.5 million at December 31, 2001 compared to $48.7 million at December 31, 2000.

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.

ITEM 2. PROPERTIES.

Set forth below is a brief summary of the properties which are owned or leased by the Registrant as of December 31, 2001.

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 operations 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, 2001.

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 March 4, 2002 was approximately 357. Due to the number of shares held in nominee or street name, it is likely that there are more than 357 beneficial owners of the Company's Class A Common Stock.

The company's Class A Common Stock closed at a price of $5.30 per share on the American Stock Exchange on March 4, 2002 on which date there were 8,878,317 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, 2001 were:

All of the 1,917,394 outstanding shares of the Company's Class B Common Stock were held by a total of 14 persons as of March 4, 2002. 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.

No cash dividends were paid in 2001 or 2000. The Company paid a 5% stock dividend on May 22, 2000.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Comparison of 2001 with 2000

The Company experienced a revenue decline of $36.8 million for the year ended December 31, 2001 when compared to the year ended December 31, 2000. The Company's truck product lines declined $50.2 million to $164.6 million from $214.8 million for year ended December 31, 2000 while the Company's bus products increased to $55.7 million from $40.9 million for year ended December 31, 2000. Delivery and other income declined $1.4 million from $7.8 million to $6.4 million for the year ended December 31, 2001.

The decline in truck revenues was consistent throughout the country as each of the Company's manufacturing facilities experienced a decline in revenue during 2001 ranging from approximately 18% to as high as 29%. Revenues from the Company's relatively small refrigerated product line produced in Wilson, North Carolina declined 42%.

The increase in bus revenues of approximately 36% is related to additional capacity added in February, 2001 to the Company's midsize and trolley production line. The additional capacity allowed the Company to maintain reasonable lead times giving it a competitive advantage over other competitors who could not deliver as timely. A portion of the Company's municipal bus business is awarded on a multi year contract basis further mitigating the economic ups and downs experienced on the truck side.

The Company's gross profit percentage declined 0.8% to 14.0% in 2001 compared to 14.8% in 2000. A slight increase in overhead expenses as a percentage of revenue was offset by a slight decrease in direct labor as a percentage of revenue. Material cost as a percentage of revenue was the significant factor in the decline in gross profit during 2001.

The Company has experienced decreases in the prices paid for its major raw material items: steel, aluminum, lumber and fiberglass related products. The reason for the increase in material cost as a percentage of revenue is a much more competitive marketplace due to excess capacity in conjunction with variations in product mix.

Selling, general and administrative expenses were $21.5 million for the year ended December 31, 2001 compared to $22.9 million for the prior year. The Company's target was to reduce these expenses by $1.0 million in 2001; the actual reduction was $1.4 million. Contributing to the reductions were decreases in consulting fees relating to the Company's operating software, declines in legal and professional fees and incentive compensation as well as improvements in OEM marketing programs.

Interest expense declined $0.9 million to $2.2 million for the year ended December 31, 2001 from $3.1 million for the year ended December 31, 2000. A decline of $1.0 million of interest expense on bank and other long term debt was offset by a $0.1 million increase in chassis interest.

The Company's effective income tax rate was 39.0% for both 2001 and 2000.

Comparison of 2000 with 1999

Revenues for the year ended December 31, 2000 increased slightly to $263.5 million compared to $258.7 million for the year ended December 31, 1999. A general slowing in the overall economy, particularly in the automotive and truck equipment sectors, negatively affected the third and fourth quarters of 2000 and continued into 2001. There was little change in the Company's overall product offerings in 2000 when compared to 1999. The Company's northeast market was the only market that experienced growth in 2000 when compared to 1999. This growth was offset by a decline in the Company's Midwest market combined with small fluctuations in the Company's other market areas.

Overall revenues by customer category changed little in 2000 when compared to 1999. No single customer represented more than 6% of the Company's annual revenues in 2000. Unit shipments declined approximately 3% in 2000 when compared to 1999.

The Company's gross profit percentage improved to 14.8% in 2000 compared to 14.0% in 1999. The Company experienced improvements in material and direct labor as a percentage of revenues in 2000 when compared to 1999. Overhead, both in dollars and as a percentage of revenue, increased slightly in 2000 when compared to 1999. Employee-related costs for health insurance and fringe benefits were up slightly in 2000 when compared to 1999. These costs are part of the Company's efforts to improve its overall benefit package to help alleviate high employee turnover during tight labor markets.

Selling, general and administrative expenses were $22.9 million or 8.7% of revenue in 2000 compared to $20.1 million or 7.8% of revenue in 1999. Expenses contributing to the increase in order of significance were: wage expense, depreciation on the new operating software and professional services. A significant portion of the increase relates to the new operating software implemented January 1, 2000. While depreciation and amortization expenses will remain higher as the software is amortized over three years (approximately $800,000 annually), fees relating to professional services will decline in 2001. The Company plans to reduce selling, general and administrative expenses by $1.0 million during 2001.

Interest expense increased $0.9 million to $3.1 million in 2000 from $2.2 million in 1999. Contributing to the increase were the five-year term loan to finance the Dutch Auction completed in May of 1999 being outstanding for the full year of 2000, the $2.5 million industrial revenue bond issued in November to purchase the Company's North Carolina manufacturing facility and a $0.1 million increase in chassis interest expense.

The Company's effective income tax rate fell to 39.0% in 2000 from 39.7% in 1999. The decline is primarily the result of fluctuations in taxable income and varying tax rates in the states in which the Company transacts business.

Liquidity and Capital Resources

Net income of $4.9 million in 2001 and availability under the revolving credit agreement continue to be the Company's major sources of funds for operations and capital expenditures. Depreciation and amortization of $4.5 million is the major noncash charge providing funds for operating activities. The Company's working capital management resulted in reductions of $4.3 million in accounts receivable and $5.1 million in inventories. Negatively impacting operating cash flow was a decrease in other current liabilities of $1.9 million, an increase of $0.7 million of other current assets and a reduction of $0.2 million in trade accounts payable.

The Company plans to continue to aggressively manage accounts receivable and inventories, but the reductions achieved over the last two years may not be possible if the economy turns more favorable.

Capital expenditures were $1.9 million during the year ended December 31, 2001, down from $8.2 million in the prior year. The Company plans to continue to hold annual capital expenditures under $4.0 million. The only exceptions to this would be major plant acquisitions for capacity expansion.

The major financing activity during the year was the $13.7 million net repayment of long- term debt. The Company also purchased 132,575 shares of its Class A Common Stock for $0.4 million. The Company had $20.0 million of availability under its revolving credit facility at February 28, 2002.

The Company believes that cash flows from operations and funds available under the Company's revolving line of credit will be sufficient to meet the Company's cash requirements during 2002.

New Accounting Pronouncements

The Company does not believe the implementation of SFAS Nos. 142, 143 or 144 (see Note A of Notes to Consolidated Financial Statements) will have a significant effect on the Company's financial position.

Forward-Looking Statements

This report contains forward-looking statements, other than historical facts, which reflect the view of the Company's management with respect to future events. Such forward-looking statements are based on assumptions made by and information currently available to the Company's 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 have been correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, limitations on the availability of chassis on which the Company's product is dependent, availability of raw materials and severe interest rate increases. The forward-looking statements contained herein reflect the current views of the Company's management with respect to future events and are sub ject to those factors and other risks, uncertainties and assumptions relating to the operations, results of operations, cash flows and financial position of the Company. The Company 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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, operations of the Company are exposed to fluctuations in interest rates. These fluctuations can vary the cost of investing, financing and operating. The Company's primary risk exposure results from changes in short-term interest rates. In an effort to manage risk exposures, the Company strives to achieve an acceptable balance between fixed and floating rate debt positions. The Company's revolving line of credit is floating rate debt and bears interest at the bank's prime rate or LIBOR plus certain basis points depending on the pricing option selected and the Company's leverage ratio. At December 31, 2001, the Company is party to two (2) interest rate swap agreements dated September 30, 1998 and May 11, 1999. The September 30, 1998 interest rate swap agreement relates to a five-year term loan (original principal balance of $7 million) and the May 11, 1999 interest rate swap agreement relates to a five-year term loan (original principal balance of $17.1 millio n). Both of these term loans bear interest at LIBOR plus certain basis points determined by the Company's leverage ratio. The effective interest rates at December 31, 2001 for these term loans were 2.81%, on outstanding principal balances of $2,449,987, and 3.13%, on outstanding principal balances of $8,964,570. The interest rate swap agreements are contracts to exchange floating rate for fixed rate interest payments over the lives of the interest rate swap agreements, which coincide with the terms of the related debt, without exchange of the underlying notional amounts. The notional amounts of the interest rate swap agreements are used to measure interest to be paid or received and do not represent the amount of exposure of credit loss. The differential paid or received under the interest rate swap agreements is recognized as an adjustment to interest expense. The following is a summary of interest rate swap agreements outstanding at December 31, 2001:

Notional Amount Fixed Rate Maturity

$2,450,000 5.8% September 30, 2003

8,964,600 5.8% May 11, 2004

Based on the Company's overall interest rate exposure at December 31, 2001, including floating rate debt and the related interest rate swap agreements, a hypothetical 10 percent change in interest rates applied to the fair value of the financial instruments as of December 31, 2001, would have no material impact on earnings, cash flows or fair values of interest rate risk sensitive instruments over a one-year period.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements Page

1. Financial Statements:

Report of Crowe, Chizek and Company LLP, Independent

Auditors 20

Report of PricewaterhouseCoopers LLP, Independent

Accountants 21

Consolidated Balance Sheets at December 31, 2001 and 2000 22

Consolidated Statements of Income for the years ended

December 31, 2001, 2000 and 1999 23

Consolidated Statements of Stockholders' Equity for the

years ended December 31, 2001, 2000 and 1999 24

Consolidated Statements of Cash Flows for the years

ended December 31, 2001, 2000 and 1999 25

Notes to Consolidated Financial Statements 26 - 38

2. Financial Statement Schedule:

Schedule II - Valuation and Qualifying Accounts for the

years ended December 31, 2001, 2000 and 1999 39

All other schedules are omitted because they are not

applicable.

3. Supplementary Data

Quarterly Results 40

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of Supreme Industries, Inc.:

We have audited the consolidated financial statements and the financial statement schedule of Supreme Industries, Inc. and its subsidiaries as of and for the year ended December 31, 2001 listed in the accompanying index. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the 2001 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Supreme Industries, Inc. and its subsidiaries as of December 31, 2001, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the 2001 financial statement schedule referred to above presents fairly, in all material respects, the information set forth therein when read in conjunction with the 2001 consolidated financial statements.

As described in Note A to the consolidated financial statements, effective January 1, 2001 the Company changed its method of accounting for derivative instruments and hedging activities.

/s/Crowe, Chizek and Company LLP

South Bend, Indiana

February 8, 2002

Report of Independent Accountants

To the Board of Directors and Stockholders of

Supreme Industries, Inc.

In our opinion, the accompanying consolidated balance sheet as of December 31, 2000 and the related consolidated statements of income, of stockholders' equity and of cash flows for each of the two years in the period ended December 31, 2000, present fairly, in all material respects, the financial position, results of operations and cash flows of Supreme Industries, Inc. and its subsidiaries at December 31, 2000 and for each of the two years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the 2000 and 1999 financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion o n these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

South Bend, Indiana

February 2, 2001

Consolidated Balance Sheets

December 31, 2001 and 2000

The accompanying notes are a part of the consolidated financial statements.

Consolidated Statements Of Income

for the years ended December 31, 2001, 2000 and 1999

The accompanying notes are a part of the consolidated financial statements.

consolidated Statements Of Stockholders' Equity

for the years ended December 31, 2001, 2000 and 1999

The accompanying notes are a part of the consolidated financial statements.

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, stake bodies and other specialized trucks. The Company also manufactures shuttle buses and trailers. At December 31, 2001, the Company had 17 manufacturing, distribution and supply facilities. 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 - 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 in accordance with Securities and Exchange Commission Staff Accounting Bulletin 101, "Revenue Recognition in Financial Statements".

Concentration of Credit Risk - Concentration of credit risk is limited due to the large number of customers and their dispersion among many different industries and geographic regions. In 1999, the Company had one customer that accounted for approximately 11% of the Company's net sales. 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.

Accounting for Freight Costs - During 2001, the Company adopted Financial Accounting Standards Board Emerging Issues Task Force ("EITF") Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs". As required by EITF 00-10, freight costs billed to customers are considered sales revenue, while freight costs incurred should be classified as cost of sales. Net freight costs have historically been classified as selling, general and administrative expenses by the Company. Freight costs billed to customers of $7,386,859 and $6,687,872 for the years ended December 31, 2000 and 1999, respectively, have been reclassified to net sales to conform to the current presentation (freight revenue of $5,972,431 is included in net sales for the year ended December 31, 2001). Freight costs incurred by the Company of $9,366,876 and $8,143,935 for the years ended December 31, 2000 and 1999, respectively, have been reclassified to cost of sales to conform to the current presentation (freight costs of $6, 976,620 are included in cost of sales for the year ended December 31, 2001). The adoption of EITF 00-10 had no impact on net income.

A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Continued.

Financial Instruments and Fair Values - The Company has entered into interest rate swap agreements to reduce the impact of changes in interest rates on certain of its floating rate debt (Term Notes B and C). The swap agreements are contracts to exchange the debt obligation's LIBOR floating rate (exclusive of the applicable spread) for fixed rate interest payments over the life of the debt obligations without exchange of the underlying notional amounts. The notional amounts of the interest rate swap agreements are used to measure interest to be paid or received and do not represent the amount of exposure of credit loss. The differential paid or received under interest rate swap agreements is recognized as an adjustment to interest expense.

The following is a summary of interest rate swap agreements outstanding at December 31, 2001 and 2000:

Notional Amount

2001 2000 Fixed Rate Maturity $2,450,000 $3,850,000 5.8% September 30, 2003 8,964,600 12,401,100 5.8% May 11, 2004

The actual market or credit exposure of these types of financial instruments are significantly less than the notional amounts. The primary risk associated with the swaps is the inability of counterparties to meet the terms of the contracts. The Company does not expect the counterparties to fail to meet their respective obligations. At December 31, 2000, the estimated fair value of the interest rate swap agreements, based on then current market rates, was not significant.

As of January 1, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," which establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS No. 133 requires the Company to recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. It further provides criteria for derivative instruments to be designated as fair value, cash flow or foreign currency hedges, and establishes accounting standards for reporting changes in the fair value in the balance sheet and recognizing the offsetting gains or losses as adjustments to be reported in net income or other comprehensive income, as appropriate. The Company designated these hedge arrangements to be highly effective cash flow hedges to fix future interest payments. The Company expects to hold these interest rate swaps through their maturity and the fair v alue of the swaps will reverse out of accumulated other comprehensive loss with the passage of time. Based on the Company's derivative positions at December 31, 2001, the Company recorded a net liability of $396,834 for the fair value of its derivative portfolio and a corresponding charge of $242,069, net of income tax benefit, to other comprehensive income.

A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Continued.

The carrying amounts of cash and cash equivalents, accounts receivable and trade accounts payable approximated fair value as of December 31, 2001 and 2000 because of the relatively short maturities of these instruments. The carrying amount of long-term debt, including current maturities, approximated fair value as of December 31, 2001 and 2000, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding long-term debt.

Cash and Cash Equivalents - The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Inventories - Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method.

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. Betterments and major renewals are capitalized and recorded in the appropriate asset accounts.

Capitalized Interest - Interest costs capitalized during the construction period of plant and equipment were $100,000 for the year ended December 31, 1999.

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, 2001 and 2000 was $2,765,455 and $2,608,575, respectively.

Evaluation of Impairment of Long-Lived Assets - In accordance with SFAS 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 material impairment of long-lived assets exists at December 31, 2001.

A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Continued.

Stock-Based Compensation - The Company has adopted the disclosure only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" and, accordingly, accounts for its stock option plans under the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."

Warranty - Estimated warranty costs are provided at the time of sale and are based upon historical experience.

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 accounting principles generally accepted in the United States of America 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.

Earnings Per Share - Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the dilutive effect of stock options. The computations of the number of shares used in the determination of basic and diluted earnings per share give retroactive recognition to all common stock dividends declared and paid during the periods.

Segment Information - The Company's principal business is manufacturing specialized vehicles. Management has not separately organized the business beyond specialized vehicles and vertically integrated fiberglass manufacturing processes. The vertically integrated fiberglass manufacturing subsidiary constitutes a segment by definition of SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information"; however, this segment does not meet the quantitative thresholds for separate disclosure as set forth in this statement. The vertically integrated fiberglass manufacturing subsidiary's revenues are less than 10 percent of consolidated revenues, the absolute amount of it's reported income is less than 10 percent of the absolute amount of consolidated net income, and finally, it's assets are less than 10 percent of consolidated assets.

New Accounting Pronouncements - In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 142, "Goodwill and Other Intangible Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 142 primarily addresses the accounting for goodwill and other intangible assets subsequent to their acquisition. The most significant changes made by SFAS 142 are (1) goodwill and indefinite lived intangible assets will no longer be amortized, (2) goodwill will be tested for impairment at least annually at the reporting unit level, (3) other intangible assets deemed to have an indefinite life will be tested for impairment at least annually, and (4) the amortization period of intangible assets with finite lives will no longer be limited to forty years. Management anticipates the adoption of SFAS No. 142 will not have a

A. NATURE OF OPERATIONS AND ACCOUNTING POLICIES, Concluded.

significant effect on the Company's consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for fiscal years beginning after June 15, 2002. The Company is currently assessing the impact of this new standard.

In July 2001, the FASB issued SFAS No. 144, "Impairment or Disposal of Long-Lived Assets," which is effective for fiscal years beginning after December 15, 2001. The provisions of this statement provide a single accounting model for impairment of long-lived assets. The Company is currently assessing the impact of this new standard.

Reclassifications - Certain amounts in the 2000 and 1999 consolidated financial statements have been reclassified to conform with the 2001 presentation. These reclassifications had no effect on total assets, stockholders' equity or net income as previously reported.

B. INVENTORIES.

Inventories consist of the following:

C. PROPERTY, PLANT AND EQUIPMENT.

Property, plant and equipment consists of the following:

D. LONG-TERM DEBT.

Long-term debt consists of the following:

The revolving line of credit, term notes and a letter of credit facility are part of a master credit agreement (the "Credit Agreement"). All borrowings under the Credit Agreement are unsecured. The Credit Agreement provides for a revolving line of credit facility as defined, up to $20 million. Interest on outstanding borrowings under the revolving line of credit is based on the bank's prime rate or certain basis points above LIBOR depending on the pricing option selected and the Company's leverage ratio, as defined. There were no outstanding borrowings under the revolving line of credit at December 31, 2001, except for checks outstanding in excess of bank balances. The weighted average interest rate on borrowings outstanding at December 31, 2000 was 8.4%. The revolving line of credit also requires a quarterly commitment fee ranging from 1/8% to 3/16% 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, 2003.

D. LONG-TERM DEBT, Concluded.

In addition to the required quarterly installments, Term Note C requires an annual principal payment to be paid within 105 days after year end, equal to 20% of the preceding year's net income which exceeds $5.0 million, with such additional annual payment not to exceed $1.0 million in any year. No additional principal payment is required to be made in 2002 based on net income for the year ended December 31, 2001 ($596,995 was paid in 2001 based on 2000 net income). The Company also made an additional principal payment of $403,005 during 2001.

Outstanding letters of credit, which reduce availability under the credit facility, aggregated $1.8 million and $1.2 million at December 31, 2001 and 2000, respectively. Under separate agreements, at December 31, 2001 the Company has outstanding $4.6 million ($4.9 million at December 31, 2000) in irrevocable letters of credit in favor of bond trustees as a credit enhancement for bondholders of two industrial development revenue bonds.

The Credit Agreement contains, among other matters, certain restrictive covenants including maintenance of a minimum consolidated tangible net worth of $28 million plus 50% of cumulative net income of the Company, as defined, commencing with the year ended December 31, 1999 ($38.6 million at December 31, 2001), minimum consolidated working capital of $10 million and required financial ratios.

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, 2001 and 2000 aggregated $883,000 and $2,670,000, respectively.

Maturities of long-term debt for each of the next five years are as follows: 2002 - $4,303,239; 2003 - $3,819,892; 2004 - $4,558,093; 2005 - $433,333 and 2006 - $366,667.

E. RETIREMENT PLAN.

The Company maintains a defined contribution plan which covers substantially all employees of the Company 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 thirty percent of employees' contributions up to seven 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, 2001, 2000 and 1999 was $436,045, $482,706 and $413,829, respectively.

F. STOCKHOLDERS' EQUITY.

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.

Common Stock Dividends

The Board of Directors approved the following 5% common stock dividends during the years ended December 31, 2000 and 1999:

	Declaration		Record		Paid
	Date		Date		Date
	June 29, 1999		July 12, 1999		July 19, 1999
	November 17, 1999		November 29, 1999		December 6, 1999
	April 27, 2000		May 15, 2000		May 22, 2000

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.

Stock Options

During 1992, the Company adopted the 1992 Stock Option Plan under which 401,117 (adjusted for all subsequent stock dividends through December 1998) shares of Class A Common Stock were reserved for grant. On October 29, 1998, the Company's Board of Directors approved, and the Company's stockholders subsequently ratified, the 1998 Stock Option Plan under which 790,079 (adjusted for all subsequent stock dividends) shares of Class A Common Stock were reserved for grant. On January 31, 2001, the Company's Board of Directors approved, and the Company's stockholders subsequently ratified, the 2001 Stock Option Plan under which 750,000 shares of Class A Common Stock were reserved for grant. Under the terms of the stock option plans, both incentive stock options and non-statutory stock options can be granted by a specially designated Stock Option Committee. No options may be exercised during the first year after the date of grant. Options are exercisable cumulatively in three installments of 33 1 /3 % each year thereafter. Options granted under the stock option plans expire five years after the date of grant.

F. STOCKHOLDERS' EQUITY, Continued.

The following table summarizes stock option activity:

As of December 31, 2001, 726,015 shares were reserved for the granting of future stock options compared to 6,192 shares at December 31, 2000.

Options outstanding at December 31, 2001 have a weighted-average remaining contractual life of 3.25 years. Information about stock options outstanding and exercisable at December 31, 2001 is as follows:

At December 31, 2000 and 1999, there were exercisable options outstanding to purchase 217,703 and 142,624 shares at weighted-average exercise prices of $6.63 and $6.30, respectively.

The weighted-average grant-date fair values of options granted during the years ended December 31, 2001 and 2000 were $1.42 and $1.72, respectively.

F. STOCKHOLDERS' EQUITY, Concluded.

Had the Company adopted the provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net income and net income per share would have been:

The pro forma amounts shown above and the weighted-average grant-date fair values of options granted were estimated using the Black-Scholes option-pricing model with the following assumptions:

G. INCOME TAXES.

Income taxes consist of the following:

G. INCOME TAXES, Concluded.

The components of the net deferred tax asset and the net deferred tax liability were as follows: