SOUTHFIELD — Superior Industries International Inc. (NYSE: SUP), the largest manufacturer of aluminum wheels for light vehicles in North America, reported net income of $6 million or 23 cents a share in the third fiscal quarter ends Sept. 25, up from $4.9 million or 19 cents a share a year earlier. Revenue was $175.6 million, down from $175.7 million last year.
For the nine months, net income was $33.6 million or $1.31 a share, up from $15.8 million or 59 cents a share a year earlier. Revenue was $544.4 million, up from $533.3 million.
Said Don Stebbins, the company’s president and CEO: “We are encouraged by another quarter of year-over-year unit shipment growth and market share gains driven by a significant increase in higher value-added products. However, despite these achievements, our financial performance in the quarter was negatively impacted by operating inefficiencies in one of our five manufacturing facilities. Reduced production rates were triggered by equipment reliability issues as well as a power interruption. Higher internal scrap rates on certain new program launches also occurred during a period of sustained heightened production levels at the facility. In order to meet customer delivery schedules, we incurred significant expedited freight, maintenance and labor costs. We expect these operating inefficiency costs to continue into the fourth quarter as we balance strong customer demand with production across our manufacturing platform. We have taken a number of actions and committed the necessary internal and external resources required to overcome these challenges in order to return to normalized production and shipment schedules as soon as possible.”
Wheel unit shipments were 2.9 million in the third quarter of 2016, up 4.8 percent from 2.8 million in the prior year period.
The decrease in profit primarily reflects $5.9 million in expedited freight costs and an estimated $3.8 million in higher labor and maintenance expense related to operating inefficiencies at one of the company’s plants, more than offsetting the benefit of higher unit shipments.
Selling, general and administrative expenses were $5.7 million, or 3.3 percent of net sales, compared to $8.4 million, or 4.8 percent of net sales in the prior year period.
The company also released an “adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)” figure of $13.8 million for the quarter, down from $17.1 milllion a year earlier. The company also releases “value-added sales,” the sales of its product minus the value of alumninum, of $98.8 million for the quarter, up from $87.9 million a year earlier.
The company boosted its sales outlook from its last guidance issued July 27, to $715 million to $725 million, up from $710 million to $725 million. The company also now predicts adjusted EBITDA for the year of $80 million to $88 million, down from an earlier estimate of $102 million to $108 million.
To listen to a replay of a conference call discussing these results, visit www.supind.com.