SOUTHFIELD — Superior Industries International Inc. (NYSE:SUP), the Southfield-based manufacturer of aluminum wheels for passenger cars and light-duty vehicles, reported net income of $4.9 million or 19 cents a share in the third fiscal quarter ended Sept. 27, up from a loss of $2.4 milion or 9 cents a share in the same quarter a year earlier.
Revenue for the quarter was $175.7 million, down 0.4 percent from $176.4 million in the same quarter a year earlier.
For the nine months, net income was $15.8 million or 59 cents a share, up from $7.4 million or 27 cents a share a year earlier. Revenue was $533.3 million, down 4.6 percent from $558.8 million a year earlier.
“Our strong third quarter results demonstrate the progress we are making in executing our strategic initiatives,” Superior presiden and CEO Don Stebbins said. “The prior closure of our older and less efficient manufacturing facility and the continued ramp-up of our newest facility, coupled with improved cost performance in each of our other manufacturing plants, drove a significant increase in adjusted EBITDA and EBITDA margin versus last year. I am also pleased by the increase in our wheel shipments this quarter, which outpaced the growth in North American light vehicle production. Moving forward, we remain focused on continuing to drive efficiencies across the business, while pursuing strong shipment growth.”
The company said the increase in net income was largely driven by higher profitability related to the previous closure of a U.S. plant and reallocation of production to other plants, including the newest facility in Mexico, which will complete its ramp up in production in the fourth quarter of 2015. Improved earnings also reflected cost improvement at all of the company’s other plants.
The loss for the prior year period also included a $3.3 million after-tax restructuring charge for the plant closure and other actions announced during the third quarter of 2014.
The sales decline was due primarily to lower value for aluminum. Unit shipments were 2.8 million in the third quarter of 2015, an increase of 6 percent compared to 2.6 million in the same period a year ago. Value-added sales, a non-GAAP financial measure that represents net sales less the value of aluminum and outsourced process costs that are passed through to customers, were $87.9 million for the third quarter of 2015, up 0.9 percnet from the same period in 2014.
Selling, general and administrative expenses for the third quarter of 2015 were $8.4 million, or 4.8 percent of sales, down 15.4 percent from $10 million, or 5.6 percent of sales, in the prior year period. The decrease primarily reflects a favorable comparison resulting from charges taken in the third quarter of 2014 of $1.2 million associated with the company’s aircraft, which have been disposed of, as well as lower legal and general consulting fees, partially offset by transition costs related to the relocation of the company’s corporate office from Van Nuys, Calif. to Southfield.
The company also released an “adjusted EBITDA,” quarterly profit of $17.4 million or 19.4 percent of value-added sales, up from $9.6 million or 11 percent of value-added sales a year earlier. The company defines this figure as earnings before interest, taxes, depreciation, amortization, restructuring charges and impairments of long-lived assets and investments.
The company also reported net cash flow of $39.1 million for the nine months ended Sept. 27, up from $5.7 million in the same period last year. The company said the improvement stemmed from favorable changes in inventory, other assets and accounts payable.
The company has raised its previously issued guidance for full year 2015 value-added sales and reported and adjusted EBITDA margin, while adjusting its previously issued guidance for net sales to reflect lower than expected aluminum prices. Superior expects net sales to be in the range of $715 million to $740 million and EBITDA margin to increase by 250 to 275 basis points. Value-added sales, which represent net sales less the value of aluminum and outside process costs that are passed through to customers, are expected to be in the range of $355 million to $375 million. Adjusted EBITDA margin as a percentage of value-added sales is expected to increase by 500 to 520 basis points.
To listen to a replay of a conference call discussing these results, visit http://www.supind.com.