Successfully completed debt refinancing
Continued margin expansion in challenging
operating environment
Third Quarter 2024 Financial Highlights:
- Net Sales of $322M
- Value-Added Sales1 of $171M
- Net Loss of $25M
- Adjusted EBITDA1 of $41M, a 24% margin2 and up 200 bps
YoY
- Cash Flow Used by Operating Activities of $3M
- Unlevered Free Cash Flow1 of $9M
Superior Industries International, Inc. (“Superior” or the
“Company”) (NYSE:SUP) today reported financial results for the
third quarter ended September 30, 2024.
($ in millions)
Three Months Nine Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Sales North America
$
206.2
$
194.9
$
602.9
$
614.7
Europe
115.5
128.2
354.1
462.0
Global
$
321.8
$
323.1
$
957.0
$
1,076.6
Value-Added Sales (1) North America
$
104.7
$
100.1
$
313.5
$
310.3
Europe
66.3
75.9
210.0
268.6
Global
$
171.0
$
176.0
$
523.5
$
578.9
1 See “Non-GAAP Financial Measures” below
for a definition and reconciliation to the most comparable GAAP
measure.
2 Adjusted EBITDA as % of Value-Added
Sales1
“Our teams executed in a challenging production environment to
deliver margin expansion and Adjusted EBITDA growth this quarter.
In addition, we successfully completed our debt refinancing,
attracting $520 million in new capital. This refinancing
significantly strengthens our balance sheet and competitive
positioning, enabling us to focus on optimizing our business to
drive profitable growth,” commented Majdi Abulaban, President and
Chief Executive Officer of Superior.
“We are adjusting our full-year outlook as production amongst
key customers has softened more than expected in the second half of
the year. Amidst these headwinds, we are working to align costs
with the current production environment,” Mr. Abulaban continued.
“That said, we are gaining momentum with global customers through
our differentiated portfolio and low-cost production footprint and
remain well-positioned to generate long-term value for all
stakeholders.”
Third Quarter 2024 Results
Net Sales for the third quarter of 2024 were $322 million,
compared to Net Sales of $323 million in the prior year period.
Value-Added Sales Adjusted for Foreign Exchange and
Deconsolidation, a Non-GAAP financial measure, was $170 million for
the third quarter 2024, compared to $173 million in the prior year
period. See “Non-GAAP Financial Measures” below and the
reconciliation of consolidated Net Sales to Value-Added Sales and
Value-Added Sales Adjusted for Foreign Exchange and Deconsolidation
in this press release.
Gross Profit for the third quarter of 2024 was $29 million,
compared to $25 million in the prior year period due to lower
conversion costs.
Selling, General, and Administrative (“SG&A”) expenses for
the third quarter of 2024 were $24 million, compared to $17 million
in the prior year period. The increase in SG&A expenses is
primarily due to professional service fees related to the
refinancing and restructuring related costs associated with the
transformation of our European business.
Income from Operations was $5 million in the third quarter of
2024, compared to a Loss from Operations of $71 million in the
prior year period. The increase is primarily due to a $80 million
charge related to the deconsolidation of our German subsidiary.
A Loss on Extinguishment of Debt for the third quarter of 2024
of $13 million was recognized related to the debt refinancing.
Income Tax Provision for the third quarter of 2024 was $1
million, compared to a provision of zero in the prior year
period.
For the third quarter of 2024, the Company reported a Net Loss
of $25 million, or Loss per Diluted Share of $1.24. This compares
to a Net Loss of $86 million, or Loss per Diluted Share of $3.42,
in the prior year period. See “Earnings per Share Calculation” in
this press release.
Adjusted EBITDA, a Non-GAAP financial measure, was $41 million,
or 24% of Value-Added Sales, in the third quarter of 2024, which
compares to $39 million, or 22% of Value-Added Sales, in the prior
year period. The increase in Adjusted EBITDA was primarily due to
slightly favorable conversion costs. See “Non-GAAP Financial
Measures” below and the reconciliation of Net Income to Adjusted
EBITDA in this press release.
The Company reported Cash Flow Used by Operating Activities of
$3 million for the third quarter of 2024, compared to Cash Flow
Provided by Operating Activities of $9 million in the prior year
period. The decrease in Cash Flow from Operating Activities was due
to the impact of refinancing fees and a slightly higher investment
in working capital. For the third quarter 2024, Free Cash Flow, a
Non-GAAP financial measure, was negative $9 million, compared to
Free Cash Flow of negative $3 million in the prior year period.
Unlevered Free Cash Flow, a Non-GAAP financial measure, for the
third quarter 2024 was $9 million, a decrease of $3 million
compared to the prior year period. The decline in Unlevered Free
Cash Flow for the quarter was due to increased working capital and
other balance sheet items. See “Non-GAAP Financial Measures” below
and the reconciliation of Cash Flow Provided by Operating
Activities to Free Cash Flow and Unlevered Free Cash Flow in this
press release.
Financial Position
As of September 30, 2024, Superior had Total Debt of $521
million and Net Debt, a Non-GAAP financial measure, of $497
million, compared to Total Debt of $630 million and Net Debt of
$453 million as of September 30, 2023. See “Non-GAAP Financial
Measures” below and the reconciliation of Total Debt to Net Debt in
this press release.
2024 Outlook
Superior’s full year 2024 Outlook is as follows:
FY 2024 Outlook Net
Sales $1.25 - $1.33 billion
Value-Added Sales $680 -
$700 million
Adjusted EBITDA $146 - $154 million
Unlevered Free Cash Flow $50 - $80 million
Capital
Expenditures ~$35 million
Superior is updating its Outlook to reflect the remainder of the
full year 2024. Net Sales estimates have been lowered due to lower
aluminum costs and lower anticipated production volumes by OEMs.
Value-Added Sales estimates have been lowered due to lower
anticipated production volumes by OEMs. Adjusted EBITDA estimates
also have been lowered due to lower anticipated production volumes
by OEMs. Unlevered Free Cash Flow estimates have been lowered to
reflect the updated Adjusted EBITDA estimate, and to reflect a
focus on balancing the maximization of Unlevered Free Cash Flow
with the liquidity requirements for the new term loan to enable
financial flexibility. As the Company successfully continues to
lower the capital intensity of the business and continues to invest
strategically in the business, Superior has reduced its
expectations for full year capital expenditures.
Value-Added Sales, Adjusted EBITDA, and Unlevered Free Cash Flow
are Non-GAAP measures, as defined below. In reliance on the safe
harbor provided under section 10(e) of Regulation S-K, Superior has
not quantitatively reconciled from Net Income (the most comparable
GAAP measure) to Adjusted EBITDA, Net Sales (the most comparable
GAAP measure) to Value-Added Sales, nor Cash Flow Provided by
Operating Activities (the most comparable GAAP measure) to
Unlevered Free Cash Flow presented in the 2024 Outlook, as Superior
is unable to quantify certain amounts included in Net Income, Net
Sales and Cash Flow Provided by Operating Activities without
unreasonable efforts and due to the inherent uncertainty regarding
such variables. Superior also believes that such reconciliation
would imply a degree of precision that could potentially be
confusing or misleading to investors. However, the magnitude of
these amounts may be significant.
Conference Call
Superior will host a conference call beginning at 8:30 AM ET on
Thursday, November 7, 2024. The conference call may be accessed by
dialing +1 800 715 9871 for participants in the U.S. or 646
307-1963 for participants outside the U.S. using the required
conference ID 1577847 when prompted by the operator. The live
conference call can also be accessed by logging into the Company’s
website at www.supind.com or by clicking this link: earnings call
webcast. A replay of the webcast will be available on the Company’s
website immediately following the conclusion of the call.
During the conference call, the Company's management plans to
review operating results and discuss financial and operating
matters. In addition, management may disclose material information
in response to questions posed by participants during the call.
About Superior Industries
Superior is one of the world’s leading aluminum wheel suppliers.
Superior’s team collaborates with customers to design, engineer,
and manufacture a wide variety of innovative and high-quality
products utilizing the latest light weighting and finishing
technologies. Superior serves the European aftermarket with the
brands ATS®, RIAL®, ALUTEC®, and ANZIO®. Headquartered in
Southfield, Michigan, Superior is listed on the New York Stock
Exchange. For more information, please visit www.supind.com.
Non-GAAP Financial Measures
In addition to the results reported in accordance with GAAP
included throughout this earnings release, this release refers to
the following non-GAAP measures:
“Adjusted EBITDA,” defined as earnings before interest income
and expense, income taxes, depreciation, amortization,
restructuring charges and other closure costs and impairments of
long-lived assets and investments, changes in fair value of
embedded debt derivative liability, acquisition and integration,
certain hiring and separation related costs, proxy contest fees,
gains and losses associated with early debt extinguishment and
accounts receivable factoring fees. “Adjusted EBITDA Margin”
defined as Adjusted EBITDA as a percentage of Value-Added Sales.
“Value-Added Sales,” defined as Net Sales less the value of
aluminum outsourced service provider costs that are included in Net
Sales. “Value-Added Sales Adjusted for FX," which is also referred
to as “Value-Added Sales Adjusted for Foreign Exchange,” defined as
Value-Added Sales adjusted for the impact of foreign exchange
translation. “Value-Added Sales Adjusted for FX and
Deconsolidation,” which is also referred to as “Value-Added Sales
Adjusted for Foreign Exchange and Deconsolidation,” defined as
Value-Added Sales adjusted for the impact of foreign exchange
translation and the impact of deconsolidating SPG. “Content per
Wheel,” defined as Value-Added Sales Adjusted for Foreign Exchange
on a per unit (wheel) shipment basis. “Free Cash Flow,” defined as
Cash Flow Provided by Operating Activities less Cash used in
Investing Activities less non-debt components of financing
activities. “Unlevered Free Cash Flow,” defined as Cash Flow
Provided by Operating Activities less Capital Expenditures plus
Cash Interest Paid, net of Interest Income and Debt Refinancing
Fees. “Net Debt,” defined as total debt excluding debt issuance
costs less cash and cash equivalents.
For reconciliations of these Non-GAAP measures to the most
directly comparable GAAP measure, see the attached supplemental
data pages. Management believes these Non-GAAP measures are useful
to management and may be useful to investors in their analysis of
Superior’s financial position and results of operations. Further,
management uses these Non-GAAP financial measures for planning and
forecasting purposes. This Non-GAAP financial information is
provided as additional information for investors and is not in
accordance with or an alternative to GAAP and may be different from
similar measures used by other companies.
Forward-Looking Statements
This press release contains statements that are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current facts
and can generally be identified by the use of future dates or words
such as “assumes,”, “may,” “should,” “could,” “will,” “expects,”
“expected,” “seeks to,” “anticipates,” “plans,” “believes,”
“estimates,” “foresee,” “intends,” “Outlook,” “guidance,”
“predicts,” “projects,” “projecting,” “potential,” “targeting,”
“will likely result,” or “continue,” or the negative of such terms
and other comparable terminology. These statements also include,
but are not limited to, the 2024 Outlook included herein, the
increase in the cost of raw materials, labor and energy, supply
chain disruptions, material shortages, higher interest rates, and
the Russian military invasion of Ukraine (the “Ukraine Conflict”)
on our future growth and earnings. These statements include our
belief regarding general automotive industry market conditions and
growth rates, as well as domestic and international economic
conditions. These statements are not guarantees of future
performance and involve risks, uncertainties, and assumptions that
are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such
forward-looking statements due to numerous factors, risks, and
uncertainties discussed in Superior's Securities and Exchange
Commission filings and reports.
New risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect
Superior. It should be remembered that the price of the ordinary
shares and any income from them can go down as well as up. Superior
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events and/or otherwise, except as may be required by
law.
SUPERIOR INDUSTRIES INTERNATIONAL, INC. Condensed
Consolidated Statements of Income (Loss) (Unaudited)
(Dollars in Millions, Except Per Share Amounts)
Three Months Nine Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Sales
$
321.8
$
323.1
$
957.0
$
1,076.6
Cost of Sales
293.1
297.8
875.6
975.7
Gross Profit
$
28.6
$
25.3
$
81.4
$
100.9
SG&A Expenses
23.9
16.9
66.1
53.3
Loss on deconsolidation of subsidiary
-
79.6
-
79.6
Income (Loss) From Operations
$
4.7
$
(71.2
)
$
15.3
$
(32.0
)
Interest Expense, net
(17.9
)
(15.7
)
(49.6
)
(47.1
)
Loss on extinguishment of debt
(13.1
)
-
(13.1
)
-
Other Expense, net
2.3
0.2
2.6
(2.6
)
Income (Loss) Before Income Taxes
$
(23.9
)
$
(86.7
)
$
(44.7
)
$
(81.7
)
Income Tax Provision
(0.9
)
0.4
(23.9
)
(8.7
)
Net Income (Loss)
$
(24.8
)
$
(86.3
)
$
(68.6
)
$
(90.4
)
Earnings (Loss) Per Share: Basic
$
(1.24
)
$
(3.42
)
$
(3.50
)
$
(4.29
)
Diluted
$
(1.24
)
$
(3.42
)
$
(3.50
)
$
(4.29
)
Weighted Average and Equivalent SharesOutstanding for EPS
(in Thousands): Basic
28,886
28,091
28,625
27,812
Diluted
28,886
28,091
28,625
27,812
SUPERIOR INDUSTRIES INTERNATIONAL, INC. Condensed
Consolidated Balance Sheets (Unaudited) (Dollars in
Millions) 9/30/2024 12/31/2023 Current
Assets
$
322.6
$
459.9
Property, Plant and Equipment, net
355.7
398.6
Intangibles and Other Assets
101.3
131.5
Derivative Financial Instruments
22.0
40.5
Total Assets
$
801.7
$
1,030.6
Current Liabilities
$
219.5
$
198.9
Long-Term Liabilities
537.0
668.4
Redeemable Preferred Shares
276.5
248.2
European Non-controlling Redeemable Equity
0.5
0.9
Shareholders’ Equity (Deficit)
(231.8
)
(85.9
)
Total Liabilities and Shareholders’ Equity (Deficit)
$
801.7
$
1,030.6
SUPERIOR INDUSTRIES INTERNATIONAL, INC. Consolidated
Statements of Cash Flows (Unaudited) (Dollars in
Millions) Three Months Nine Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Income (Loss)
$
(24.8
)
$
(86.3
)
$
(68.6
)
$
(90.4
)
Depreciation and Amortization
21.7
23.6
65.5
69.9
Income tax, Non-cash Changes
(2.4
)
(2.1
)
16.3
9.3
Stock-based Compensation
2.0
1.4
6.1
4.4
Amortization of Debt Issuance Costs
1.6
1.2
4.0
3.6
Loss on Deconsolidation of Subsidiary
-
79.6
-
79.6
Loss on Extinguishment of Debt
13.1
-
13.1
-
Other Non-cash Items
(6.1
)
(4.7
)
(9.0
)
(4.7
)
Changes in Operating Assets and Liabilities: Accounts Receivable
(25.8
)
(13.1
)
(54.4
)
(38.0
)
Inventories
3.6
(9.6
)
(2.7
)
(8.2
)
Other Assets and Liabilities
8.2
11.9
6.3
12.7
Accounts Payable
5.2
7.7
21.4
(5.1
)
Income Taxes
0.4
(0.6
)
(5.7
)
(12.9
)
Net Cash Provided (Used) By Operating Activities
$
(3.3
)
$
8.9
$
(7.9
)
$
20.1
Capital Expenditures
(6.1
)
(7.7
)
(21.0
)
(29.5
)
Deconsolidation of Subsidiary Cash
-
(4.4
)
-
(4.4
)
Net Cash Provided (Used) By Investing Activities
$
(6.1
)
$
(12.2
)
$
(21.0
)
$
(33.9
)
Proceeds from the Issuance of Long-term Debt
337.3
-
337.3
-
Repayments of Debt
(463.5
)
(1.6
)
(466.3
)
(14.0
)
Proceeds from Borrowings on Revolving Credit Facility
28.0
-
28.0
-
Repayments of Borrowings on Revolving Credit Facility
(28.0
)
-
(28.0
)
-
Cash Dividends Paid
-
(0.1
)
(3.4
)
(6.8
)
Financing Costs Paid and Other
(8.7
)
(0.1
)
(9.0
)
(0.1
)
Redemption Premium Paid on Term Loan Repayment
(3.7
)
-
(3.7
)
-
Payments Related to Tax Withholdings for Stock-Based Compensation
-
-
(1.3
)
(3.3
)
Finance Lease Payments
(0.2
)
-
(0.5
)
(0.6
)
Net Cash Flow Provided (Used) By Financing Activities
$
(138.7
)
$
(1.8
)
$
(146.8
)
$
(24.8
)
Effect of Exchange Rate on Cash
0.2
0.4
(1.7
)
2.1
Net Change in Cash
$
(148.0
)
$
(4.6
)
$
(177.3
)
$
(36.5
)
Cash - Beginning
172.3
181.1
201.6
213.0
Cash - Ending
$
24.3
$
176.5
$
24.3
$
176.5
SUPERIOR INDUSTRIES INTERNATIONAL, INC. Earnings Per
Share Calculation (Unaudited) (Dollars and Outstanding
Shares in Millions, Except Per Share Amounts) Three
Months Nine Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Income (Loss)
Attributable to Common Shareholders
$
(24.8
)
$
(86.3
)
$
(68.6
)
$
(90.4
)
Redeemable Preferred Stock Dividends and Accretion
(11.1
)
(9.9
)
(31.6
)
(28.9
)
Basic Numerator
$
(35.9
)
$
(96.2
)
$
(100.2
)
$
(119.2
)
Weighted Avg. Shares Outstanding - Basic
28.9
28.1
28.6
27.8
Dilutive Effect of Common Share Equivalents
-
-
-
-
Weighted Avg. Shares Outstanding - Diluted
28.9
28.1
28.6
27.8
Basic Earnings (Loss) Per Share(1)
$
(1.24
)
$
(3.42
)
$
(3.50
)
$
(4.29
)
Diluted Earnings (Loss) Per Share(1)
$
(1.24
)
$
(3.42
)
$
(3.50
)
$
(4.29
)
(1) Basic earnings per share is computed by dividing
net income (loss), after deducting preferred dividends and
accretion and European non-controlling redeemable equity dividends,
by the weighted average number of common shares outstanding. For
purposes of calculating diluted earnings per share, the weighted
average shares outstanding includes the dilutive effect of
outstanding stock options and time and performance based restricted
stock units under the treasury stock method. The redeemable
preferred shares are not included in the diluted earnings per share
because the conversion would be anti-dilutive for the periods ended
September 30, 2024 and 2023.
SUPERIOR INDUSTRIES INTERNATIONAL,
INC. Non-GAAP Financial Measures (Unaudited) (Dollars
in Millions and Units in Thousands, Except Per Wheel)
Value-Added Sales, Value-Added Sales
Adjusted for Foreign Exchange, and Value-Added Sales Adjusted for
Foreign Exchange and Deconsolidation, and Content per Wheel
(1) SPG (2) Three
Months Nine Months Trailing Twelve Months
Twelve Months Three Months
3Q 2024
3Q 2023
YTD 2024
YTD 2023
3Q 2024
3Q 2023
YTD 2019
3Q 2023
Net Sales
$
321.8
$
323.1
$
957.0
$
1,076.6
$
1,265.7
$
1,478.7
$
1,372.5
$
15.3
Less: Aluminum, and Outside Service Provider Costs
(150.7
)
(147.1
)
(433.5
)
(497.7
)
(573.5
)
(681.8
)
(617.2
)
(12.6
)
Value-Added Sales (1)
$
171.0
$
176.0
$
523.5
$
578.9
$
692.2
$
796.9
$
755.3
$
2.7
Currency Impact on Current Period Value-Added Sales
(1.0
)
-
(1.0
)
-
(17.2
)
-
(31.9
)
Value-Added Sales Adjusted for Foreign Exchange (1)
$
170.0
$
176.0
$
522.5
$
578.9
$
675.0
$
796.9
$
723.4
Deconsolidation Impact
-
(2.7
)
-
(32.3
)
Value-Added Sales Adjusted for Foreign Exchange and
Deconsolidation (1)
$
170.0
$
173.3
$
522.5
$
546.6
Wheels Shipped
3,381
3,428
10,473
11,067
13,968
14,794
19,246
Content per Wheel (1) (3)
$
50.29
$
51.34
$
49.89
$
52.31
$
48.33
$
53.87
$
37.59
SPG (2) Adjusted EBITDA
(1) Three Months Nine
Months Three Months
3Q 2024
3Q 2023
YTD 2024
YTD 2023
3Q 2023
Net Income (Loss)
$
(24.8
)
$
(86.3
)
$
(68.6
)
$
(90.4
)
$
(9.7
)
Adjusting Items: - Interest Expense, net
17.9
15.7
49.6
47.1
0.4
- Income Tax Provision (Benefit)
0.9
-0.4
23.9
8.7
0.9
- Depreciation
16.8
18.7
50.9
55.3
1.3
- Amortization
4.9
4.9
14.7
14.6
-
- Factoring Fees
1.9
0.8
4.2
2.8
-
- Loss on Extinguishment of Debt and Other Refinancing Costs
17.3
0
18.8
0
-
- Loss on Deconsolidation of Subsidiary
-
79.6
-
79.6
-
- Restructuring and Restructuring Related Costs
6.2
5.6
18.5
18.4
-
- Change in Fair Value of Embedded Debt Derivative Liability
(0.3
)
-
(0.3
)
-
-
$
65.6
$
124.9
$
180.3
$
226.5
$
2.6
Adjusted EBITDA (1)
$
40.8
$
38.6
$
111.6
$
136.1
$
(7.0
)
(1) Value-Added Sales, Value Added Sales Adjusted for
Foreign Exchange, and Adjusted EBITDA are non-GAAP financial
measures; see page 4 for definitions. (2) Amounts relate to SPG
stand-alone operating results for the three months ended September
30, 2023. (3) Content per wheel is stated in currency rates
prevailing in the corresponding periods of 2023.
Free Cash Flow (1) Three Months Nine Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Cash Provided (Used) By
Operating Activities
$
(3.3
)
$
8.9
$
(7.9
)
$
20.1
Net Cash Provided (Used) By Investing Activities
(6.1
)
(12.2
)
(21.0
)
(33.9
)
Cash Payments for Non-debt Financing Activities
-
(0.1
)
(4.7
)
(10.1
)
Free Cash Flow (1)
$
(9.4
)
$
(3.4
)
$
(33.6
)
$
(23.9
)
Unlevered Free Cash Flow
(1) Three Months Nine
Months
3Q 2024
3Q 2023
YTD 2024 YTD 2023 Net Cash Provided (Used) By
Operating Activities
$
(3.3
)
$
8.9
$
(7.9
)
$
20.1
Capital Expenditures
(6.1
)
(7.7
)
(21.0
)
(29.5
)
Refinancing Costs
4.2
-
5.7
-
Cash Interest Paid, Net of Interest Income
14.0
11.1
42.6
39.3
Unlevered Free Cash Flow (1)
$
8.8
$
12.3
$
19.4
$
29.9
Net Debt (1)
(2) 9/30/2024 9/30/2023 Long Term Debt
(Less Current Portion)
$
515.2
$
623.1
Short Term Debt
5.8
6.7
Total Debt
521.0
629.8
Less: Cash and Cash Equivalents
(24.3
)
(176.5
)
Net Debt (1)
496.7
453.3
(1) Net Debt, Free Cash Flow, and Unlevered Free Cash Flow
are non-GAAP financial measures; see page 4 for definitions. (2)
Excluding Debt Issuance Cost
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107668613/en/
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