Superior Industries Sales, Net Income Dip

SOUTHFIELD — Superior Industries International Inc. (NYSE:SUP), the Southfield-based manufacturer of aluminum wheels for light vehicles, reported net income of $7.8 million or 31 cents a share in the fourth fiscal quarter ended Dec. 25, down from $8.1 million or 31 cents a share in the same quarter a year earlier. Revenue was $188.3 million, down from $194.6 million a year earlier.For the full fiscal year, net income was $41.4 million or $1.62 a share, up from $23.9 million or 90 cents a share, in fiscal 2015. The prior year’s net income was hurt by $6 million in restructuring costs, compared to $1.5 million in restructuring costs in 2016.

“In 2016 we delivered significantly improved financial performance compared to 2015 including an 80 percent increase in earnings per share,” CEO Don Stebbins said. “I would like to thank our employees for their dedication and hard work throughout the year which led to this achievement. Entering 2017, I am confident we can deliver stronger results. Our strategic plan remains focused on driving greater operating efficiency in our manufacturing footprint and further strengthening our global competitiveness.”

Wheel unit shipments were 3.1 million in the fourth quarter of 2016, a decrease of 3.6 percent, compared to near-record fourth quarter unit shipments of 3.2 million in the prior year period. Value-added sales, a non-GAAP financial measure defined as net sales less pass-through charges, primarily for the value of aluminum, were $106.4 million for the fourth quarter of 2016, a 3.3 percent increase compared to the fourth quarter of 2015, driven by favorable product mix and other revenue partially offset by lower unit volume and foreign exchange rates, specifically the Mexican peso versus the dollar.

Gross profit for the fourth quarter of 2016 was $18 million or 9.5 percnet of sales, down from $23.6 million 12.1 percent of net sales in the prior year period. The decrease in gross profit primarily reflects $5.9 million in expedited freight costs during the fourth quarter. Excluding these costs, gross profit as a percentage of net sales would have been 312 basis points higher than reported and 54 basis points higher than the prior year period. Since early January 2017, there have been no expedited shipments.

Selling, general and administrative expenses for the fourth quarter were $6.9 million, or 3.7 percent of net sales, compared to $10.1 million, or 5.2 percent of net sales in the prior year period. The decrease of 31.7 percent primarily reflects a gain on the sale of the Rogers, Ark. plant and a reduction in accrued compensation expense.

For the full fiscal year, wheel shipments increased 9 percent to 12.3 million compared to 11.2 million in 2015. Value-added sales for 2016 were $408.7 million, a 13.3 percent increase over value-added sales of $360.8 million in 2015.

Gross profit for 2016 increased to $86.2 million or 11.8 percent of sales, from $71.2 million or 9.8 percent of sales in the prior year period. The increase in gross profit reflects higher unit shipments, cost structure improvement primarily driven by the new plant in Mexico operating at higher utilization rates, as well as improved mix. The increase in gross profit was partially offset by $13.3 million in expedited freight costs.

Selling, general, and administrative expenses decreased to $31.6 million, or 4.3 percent of sales in 2016, compared to $34.9 million, or 4.8 percent in the prior year period.

The company expects North American light vehicle production to decrease about 2 percent to 17.5 million units in 2017 and the company’s resulting market share to remain stable compared to 2016.

To listen to a replay of a conference call discussing these results, visit http://www.supind.com.

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