Superior Industries Sales, Profits Dip

SOUTHFIELD — Superior Industries International Inc. (NYSE:SUP) reported a decline in both revenue and net income for the fiscal quarter and fiscal year ended Dec. 28.

For the full year, revenue was $745.4 million, down from $789.6 million in fiscal 2013. Net income was $8.8 million or 33 cents a share, down from $22.8 million or 83 cents a year in fiscal 2013.

For the quarter, revenue was $186.7 millilon, down from $192.5 million in the same quarter a year earlier. Net income was $1.4 million or 5 cents a share, down from $6.4 million or 23 cents a share a year earlier.

Superior Industries is the largest manufacturer of aluminum wheels for passenger cars and light-duty vehicles in North America.

Despite the declines, Superior president and CEO Don Stebbins called 2014 “an important year for Superior as we strengthened the foundation of our company. We successfully transitioned production from our Rogers, Arkansas facility to other, more cost-efficient facilities, began the launch of our newly constructed facility in Mexico, strengthened our management team and board of directors, and began the process of enhancing our competitiveness. We ended the year in a stronger position with some key investments and decisions behind us and are looking forward to 2015 as a year of solid improvement. We also remain committed to returning cash to shareholders through our dividend and share repurchase programs.”

For the year, the company said the decline in net income was due to lower unit shipments, costs associated with the closing of the Arkansas plant, the sale process of the company’s two aircraft and the impairment of an investment in an unconsolidated subsidiary located in India. Those costs hit net income by a total of $8.6 million after tax, or 32 cents a share.

The company said the 8 percent sales decline was caused by lower unit volume and an unfavorable change in product mix. Unit shipments decreased 0.8 million to 11.1 million in 2014. Partially offsetting the decline in unit shipments was an increase in average selling price, due to higher aluminum prices generally passed through to the customer.

Selling, general, and administrative expenses for 2014 were $32.3 million, or 4.3 percent of net sales, compared with $29.5 million, or 3.7 percent of net sales in 2013. The increase was primarily attributable to the sales process of the company’s aircraft, costs for a proxy fight during the year, and fees for strategic market and other key business assessments.

Adjusted for one-time events, earnings before interest, taxes, depreciation, amortization, restructuring charges and impairments of long-lived assets and investments was $55.8 million for the year, down from last year’s $63.6 million.

Net income in the fourth quarter was also impacted by lower unit shipments and costs associated with the closure of the Arkansas plant, the sale process of the company’s remaining aircraft and the impairment of an investment in an unconsolidated subsidiary located in India. These costs totaled $4.3 million after tax, or $0.16 per share. The net income decline was offset partially by a lower effective tax rate in the 2014 fourth quarter of 21 percent vs. 48 percent a year earlier.

The sales decline in the quarter, 3 percent, is attributable to reduced unit sales volume and an unfavorable change in product mix, offset partially by higher aluminum prices generally passed through to the customer.

Based on the current outlook, Superior reaffirmed its 2015 guidance provided Jan. 19 — sales of $725 million to $800 million and a 1 to 2 percent increase in EBITDA, with capital spending of $40 million, significantly lower than in 2014, when the company was investing in the completion of its new plant in Mexico.

“We enter 2015 with confidence and expect our performance will improve as we move through the balance of the year driven by three factors,” Stebbins said. “First, we are ramping up production at our new Mexico facility throughout the year and aim to reach full capacity by the end of 2015. Second, we anticipate our shipment volumes to improve in the back half of the year. Third, we are actively implementing operational excellence initiatives across the business to enhance our competitive position. We look forward to building upon the progress achieved in 2014 and continuing to drive efficiencies across the business, making disciplined investments to produce sustainable, long-term growth.”

To listen to a replay of a conference call discussing these results, and view a PowerPoint presentation on the company’s finances, visit www.supind.com.

Superior also announced that its board of directors has declared a quarterly cash dividend of 18 cents a share, payable April 17 to shareholders of record as of April 3.

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