Driving sustainable operating performance
despite industry headwinds Differentiated product portfolio
supporting Growth over Market
Second Quarter 2021 Financial Highlights:
- Net sales of $347.5M; Value-Added Sales Adj. for FX1
increased 121%2 YoY to $186.3M
- Portfolio delivered 9% Content per Wheel1 growth; Growth
over Market of 12%2
- Net income of $1.7M, a $44.9M increase YoY
- Adjusted EBITDA1 increased $48.3M YoY to $44.6M; margin
expanded 2,720 bps3
- Funded debt of $632.9M and Net Debt1 of $483.7M
- Cash from operations of $13.8M
Superior Industries International, Inc. (“Superior” or the
“Company”) (NYSE:SUP) today reported financial results for the
second quarter ended June 30, 2021.
($ in millions, units in thousands)
Three Months
2Q 2021
2Q 2020
Units North America
2,104
841
Europe
2,074
1,227
Global
4,178
2,068
Net Sales North America
$
177.0
$
58.9
Europe
170.5
85.9
Global
$
347.5
$
144.8
Value-Added Sales (1) North America
$
88.6
$
31.4
Europe
106.9
52.9
Global
$
195.5
$
84.3
“We delivered strong results for the second quarter; again,
driving substantial Growth over Market as we focused on continued
execution against our value creation roadmap. We achieved these
results despite the unstable production environment and supply
chain constraints, especially the semiconductor shortage, impacting
the automotive industry,” said Majdi Abulaban, President and Chief
Executive Officer of Superior.
“While we anticipate ongoing headwinds stemming from the
semiconductor shortage in the latter half of the year, we are
confident that demand for our robust portfolio of differentiated
technologies, supported by secular trends, including
electrification and CO2 reduction, will enable Superior’s continued
Growth over Market,” Mr. Abulaban continued.
1
See “Non-GAAP Financial Measures” below
for a definition and reconciliation to the most comparable GAAP
measure.
2
Based on Value-Added Sales Adjusted for
Foreign Exchange; comparison vs. Q2 2021 NA and Western and Central
EU industry production per July 16, 2021, as reported by IHS.
3
Expressed as Adjusted EBITDA margin as a
percentage of Value-Added Sales, both Non-GAAP Financial Measures;
see footnote 1 above.
Second Quarter Results
Net sales for the second quarter of 2021 were $347.5 million,
compared to net sales of $144.8 million in the prior year period.
Value-Added Sales, a non-GAAP financial measure, were $195.5
million for the second quarter of 2021 compared to $84.3 million in
the prior year period. The increase in the quarter was driven by
higher volumes in North America and Europe due to 2020 shutdowns at
key OEM customers in response to the COVID-19 pandemic, stronger
product mix in both North America and Europe, as well as favorable
Euro foreign exchange.
Value-Added Sales adjusted for Foreign Exchange, a non-GAAP
financial measure, increased 121%, or 12% above market, which was
driven by the ongoing portfolio shift to larger diameter wheels
with more premium content. 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 in this
press release.
Gross profit for the second quarter of 2021 was $32.6 million,
compared to a loss of $22.8 million in the prior year period. The
increase in gross profit for the quarter was primarily due to
higher sales and stronger product mix.
Selling, general, and administrative (“SG&A”) expenses for
the second quarter of 2021 were $17.1 million, compared to $11.3
million in the prior year period. The increase in SG&A expenses
is primarily due to lower prior period compensation and benefit
expense resulting from cost saving actions taken in response to the
COVID-19 driven OEM and Superior production shutdowns.
Operating income for the second quarter of 2021 was $15.5
million, compared to a loss from operations of $34.1 million in the
prior year period. The increase is primarily due to higher net
sales in the second quarter of 2021.
The income tax provision for the second quarter of 2021 was $0.9
million on pre-tax income of $2.6 million.
For the second quarter of 2021, the Company reported net income
of $1.7 million, or loss per diluted share of $0.26, compared to a
net loss of $43.2 million, or loss per diluted share of $2.00, in
the second quarter of 2020.
Adjusted EBITDA, a non-GAAP financial measure, was $44.6 million
for the second quarter of 2021, or 22.8% of Value-Added Sales,
which compares to a loss of $3.7 million, or (4.4%) of Value-Added
Sales in the prior year period. The increase in Adjusted EBITDA was
driven by increased volume versus the prior year period, stronger
product mix, and improved manufacturing performance. The second
quarter of 2020 was adversely affected by plant shutdowns resulting
from COVID-19. See “Non-GAAP Financial Measures” below and the
reconciliation of net income to Adjusted EBITDA in this press
release.
Net cash provided by operating activities of $13.8 million in
the second quarter of 2021, compared to cash used by operating
activities of $38.4 million during the second quarter of 2020,
which was affected by the shutdown of our facilities due to
COVID-19. Free Cash Flow, a non-GAAP financial measure, was $0.3
million for the second quarter, compared to a use of cash of $51.4
million in the prior year period. See “Non-GAAP Financial Measures”
below and the reconciliation of cash flow from operations to Free
Cash Flow in this press release.
Financial Position
As of June 30, 2021, Superior had funded debt of $632.9 million
and Net Debt, a non-GAAP financial measure, of $483.7 million,
compared to funded debt of $630.3 million and Net Debt of $476.5
million as of March 31, 2021. The increase in Net Debt of $7.2
million compared to the end of the prior quarter was driven by the
appreciation of our Euro-denominated debt resulting from the Euro
strengthening against the US-Dollar. See “Non-GAAP Financial
Measures” below and the reconciliation of funded debt to Net Debt
in this press release.
2021 Outlook
The Company reconfirmed its Full Year 2021 guidance, despite the
ongoing impact of the semiconductor shortages, including lower
industry production volumes. Based on IHS' latest forecast and
management’s estimates for 2021, Superior assumes industry
production in North America and Europe to increase year-over-year
in 2021 by 10% and 7.5%, respectively. Based on this outlook for
industry production and Superior’s portfolio, the Company’s full
year 2021 outlook is as follows:
FY 2021 Unit Shipments 16.9 - 17.7
million
Net Sales $1.30 - $1.37 billion
Value-Added Sales $740 - $780 million
Adjusted
EBITDA $160 - $180 million
Cash Flow from
Operations $110 - $130 million
Capital
Expenditures ~$75 million
Mr. Abulaban continued, “The second quarter reflects
industry-wide instability as OEM production schedules are being
adversely impacted by semiconductor shortages. This, in turn, has
resulted in inefficiencies in our manufacturing operations which
are being partly offset by the ongoing product mix shift to premium
vehicles and an improved enterprise cost structure. We believe we
are well-positioned to benefit from pent-up demand once supply
issues resolve throughout the automotive industry and we look
forward to continuing our progress in generating shareholder value
and maintaining our position as a leading light vehicle aluminum
wheel supplier.”
Value-Added Sales and Adjusted EBITDA are non-GAAP measures, as
defined below. In reliance on the safe harbor provided under
section 10(e) or Regulation S-K, Superior has not quantitatively
reconciled from net income, the most comparable GAAP measure, to
Adjusted EBITDA presented in the 2021 outlook, as Superior is
unable to quantify certain amounts included in net income 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
Wednesday, August 4, 2021. The conference call may be accessed by
dialing 866-269-4262 for participants in the U.S./Canada or +1
313-209-6317 for participants outside the U.S./Canada using the
required conference ID 3116219. 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 lightweighting 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, impairments of
long-lived assets and investments, changes in fair value of
redeemable preferred stock embedded derivative, acquisition and
integration and other related costs, certain hiring and separation
related costs, proxy contest fees, gains associated with early debt
extinguishment and accounts receivable factoring fees. “Value-Added
Sales,” defined as net sales less the value of aluminum and
services provided by outsourced service providers that are included
in net sales. “Value-Added Sales Adjusted for Foreign Exchange,”
defined as Value-Added Sales adjusted for the impact of foreign
exchange translation. “Content per Wheel,” defined as Value-Added
Sales Adjusted for FX on a per unit (wheel) shipment basis. “Free
Cash Flow,” defined as the net cash from operations, investing
activities, and non-debt components of financing activities. “Net
Debt,” defined as total funded debt 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,” “intends,” “outlook,” “guidance,” “predicts,”
“projects,” “potential” or “continue,” or the negative of such
terms and other comparable terminology. These statements also
include, but are not limited to, the 2021 outlook included herein,
Superior’s strategic and operational initiatives, product mix and
overall cost improvement and are based on current expectations,
estimates, and projections about Superior's business based, in
part, on assumptions made by management. 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, including
Superior's current Annual Report on Form 10-K, and other reports
from time to time filed with the Securities and Exchange
Commission. You are cautioned not to unduly rely on such
forward-looking statements when evaluating the information
presented in this press release. Such forward-looking statements
speak only as of the date on which they are made, and Superior does
not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this
release.
SUPERIOR INDUSTRIES INTERNATIONAL, INC. Condensed
Consolidated Statements of Operations (Unaudited) (Dollars
in Millions, Except Per Share Amounts) Three
Months Six Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 Net Sales
$
347.5
$
144.8
$
705.7
$
445.9
Cost of Sales
314.8
167.7
630.0
445.6
Gross Profit (Loss)
$
32.6
$
(22.8
)
$
75.7
$
0.3
SG&A Expenses
17.1
11.3
34.4
23.8
Impairment of Goodwill and Indefinite-Lived Intangibles
-
-
-
193.6
Income (Loss) From Operations
$
15.5
$
(34.1
)
$
41.2
$
(217.1
)
Interest Expense, net
(10.5
)
(12.2
)
(20.8
)
(24.0
)
Other (Expense) Income, net
(2.4
)
(0.7
)
(3.9
)
0.7
Income (Loss) Before Income Taxes
$
2.6
$
(47.0
)
$
16.5
$
(240.5
)
Income Tax Benefit (Provision)
(0.9
)
3.8
(1.7
)
7.2
Net Income (Loss)
$
1.7
$
(43.2
)
$
14.8
$
(233.3
)
Loss Per Share: Basic
$
(0.26
)
$
(2.00
)
$
(0.07
)
$
(9.81
)
Diluted
$
(0.26
)
$
(2.00
)
$
(0.07
)
$
(9.81
)
Weighted Average and Equivalent SharesOutstanding for EPS
(in Thousands): Basic
25,974
25,562
25,841
25,403
Diluted
25,974
25,562
25,841
25,403
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in Millions) 6/30/2021
12/30/2020 Current Assets
$
462.1
$
383.7
Property, Plant and Equipment, net
503.1
522.1
Intangibles and Other Assets
183.1
203.6
Total Assets
$
1,148.4
$
1,109.3
Current Liabilities
$
273.9
$
231.1
Long-Term Liabilities
704.1
718.6
Redeemable Preferred Shares
189.4
179.4
European Non-controlling Redeemable Equity
1.6
1.7
Shareholders’ Equity (Deficit)
(20.6
)
(21.5
)
Total Liabilities and Shareholders’ Equity (Deficit)
$
1,148.4
$
1,109.3
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Millions) Three Months Six
Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 Net Income (Loss)
$
1.7
$
(43.2
)
$
14.8
$
(233.3
)
Depreciation and Amortization
25.6
23.9
51.0
48.3
Income tax, Non-cash changes
(0.1
)
(8.1
)
(2.9
)
(14.0
)
Impairments of Goodwill and Indefinite-Lived Intangibles
-
-
-
193.6
Stock-based Compensation
2.5
0.9
4.3
0.2
Amortization of Debt Issuance Costs
1.9
0.9
2.7
2.3
Other Non-cash items
0.6
1.1
(3.9
)
(2.5
)
Changes in Operating Assets and Liabilities: Accounts Receivable
(0.3
)
10.3
(37.2
)
9.8
Inventories
(31.4
)
22.3
(46.1
)
17.1
Other Assets and Liabilities
2.0
(1.7
)
15.9
1.2
Accounts Payable
13.1
(48.2
)
34.4
(31.3
)
Income Taxes
(1.8
)
3.5
(1.0
)
1.4
Cash Flow Provided By (Used In) Operating Activities
$
13.8
$
(38.4
)
$
31.9
$
(7.1
)
Capital Expenditures
(10.1
)
(8.9
)
(20.6
)
(22.8
)
Net Cash Used In Investing Activities
$
(10.1
)
$
(8.9
)
$
(20.6
)
$
(22.8
)
Proceeds from the Issuance of Long-term Debt
-
-
1.7
11.7
Debt Repayment
(1.3
)
(1.5
)
(2.1
)
(24.1
)
Proceeds from Borrowings on Revolving Credit Facility
-
-
-
213.8
Repayments of Borrowings on Revolving Credit Facility
-
(101.0
)
-
(107.0
)
Cash Dividends
(3.4
)
(3.4
)
(6.7
)
(6.8
)
Financing Costs Paid and Other
(4.3
)
(0.7
)
(4.3
)
(4.9
)
Payments Related to Tax Withholdings for Stock-Based Compensation
-
-
(1.3
)
-
Finance Lease Payments
(0.4
)
(0.3
)
(0.6
)
(0.5
)
Cash Flow (Used In) Provided By Financing Activities
$
(9.3
)
$
(106.9
)
$
(13.5
)
$
82.2
Effect of Exchange Rate on Cash
0.9
2.8
(1.1
)
0.5
Net Change in Cash
$
(4.7
)
$
(151.4
)
$
(3.3
)
$
52.8
Cash - Beginning
153.8
282.2
152.4
77.9
Cash - Ending
$
149.2
$
130.7
$
149.2
$
130.7
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Earnings Per Share Calculation (Unaudited) (Dollars,
except per share, and Shares in Millions) Three
Months Six Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 Basic EPS
Calculation(1) Net Income (Loss)
$
1.7
$
(43.2
)
$
14.8
$
(233.3
)
Less: Accretion of Preferred Stock
(5.1
)
(4.4
)
(10.0
)
(9.0
)
Less: Redeemable Preferred Stock Dividends
(3.4
)
(3.5
)
(6.7
)
(6.8
)
Numerator
$
(6.8
)
$
(51.1
)
$
(1.9
)
$
(249.1
)
Denominator: Weighted Avg. Shares Outstanding
26.0
25.6
25.8
25.4
Basic Loss Per Share
$
(0.26
)
$
(2.00
)
$
(0.07
)
$
(9.81
)
Diluted EPS
Calculation(1) Net Income (Loss)
$
1.7
$
(43.2
)
$
14.8
$
(233.3
)
Less: Accretion of Preferred Stock
(5.1
)
(4.4
)
(10.0
)
(9.0
)
Less: Redeemable Preferred Stock Dividends
(3.4
)
(3.5
)
(6.7
)
(6.8
)
Numerator
$
(6.8
)
$
(51.1
)
$
(1.9
)
$
(249.1
)
Weighted Avg. Shares Outstanding-Basic
26.0
25.6
25.8
25.4
Dilutive Stock Options and Restricted Stock Units
-
-
-
-
Denominator: Weighted Avg. Shares Outstanding
26.0
25.6
25.8
25.4
Diluted Loss Per Share
$
(0.26
)
$
(2.00
)
$
(0.07
)
$
(9.81
)
(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 June 30,
2021 and 2020.
SUPERIOR INDUSTRIES INTERNATIONAL,
INC. Non-GAAP Financial Measures (Unaudited) (Dollars
in Millions, except per wheel, and Units in Thousands)
Value-Added Sales; Value-Added Sales
Adjusted for FX; andContent per
Wheel Three Months Six Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 YTD 2019 Net Sales
$
347.5
$
144.8
$
705.7
$
445.9
$
710.2
Less: Aluminum Value and Outside Service Provider Costs
(152.0
)
(60.6
)
(302.9
)
(191.6
)
(323.8
)
Value-Added Sales
$
195.5
$
84.3
$
402.7
$
254.4
$
386.4
Impact of FX on Value-Added Sales
(9.2
)
-
(18.1
)
-
-
Value-Added Sales Adjusted for FX
$
186.3
$
84.3
$
384.6
$
254.4
$
386.4
Wheels Shipped
4,178
2,068
8,693
6,375
9,929
Content per Wheel
$
44.60
$
40.76
$
44.24
$
39.91
$
38.92
Adjusted EBITDA Three
Months Six Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 YTD 2019 Net Income
(Loss)
$
1.7
$
(43.2
)
$
14.8
$
(233.3
)
$
9.2
Adjusting Items: - Interest Expense, net
10.5
12.2
20.8
24.0
23.7
- Income Tax Provision (Benefit)
0.9
(3.8
)
1.7
(7.2
)
12.5
- Depreciation
18.9
17.8
37.6
36.1
33.2
- Amortization
6.7
6.1
13.4
12.3
13.5
- Acquisition, Integration, and Other Related Cost
5.4
7.0
10.3
10.0
(0.3
)
- Factoring Fees
0.5
0.2
1.0
0.3
0.6
- Impairment of Goodwill and Indefinite-Lived Intangibles
-
-
-
193.6
-
$
42.9
$
39.5
$
84.8
$
269.1
$
83.2
Adjusted EBITDA
$
44.6
$
(3.7
)
$
99.6
$
35.8
$
92.4
SUPERIOR INDUSTRIES
INTERNATIONAL, INC. Non-GAAP Financial Measures
(Unaudited) (Dollars in Millions)
Free Cash
Flow Three Months Six Months
2Q 2021
2Q 2020
YTD 2021 YTD 2020 Cash Flow Provided
By (Used In) Operating Activities
$
13.8
$
(38.4
)
$
32.0
$
(7.1
)
Net Cash Used In Investing Activities
(10.1
)
(8.9
)
(20.6
)
(22.8
)
Less: Cash Payments for Non-debt Financing Activities
(3.4
)
(4.1
)
(8.1
)
(11.7
)
Free Cash Flow
$
0.3
$
(51.4
)
$
3.3
$
(41.6
)
Net Debt
6/30/2021 12/30/2020 Long Term Debt (less
current portion)
$
626.4
$
637.1
Short Term Debt
6.5
6.1
Total Debt
632.9
643.2
Less: Cash and Cash Equivalents
(149.2
)
(152.4
)
Net Debt
$
483.7
$
490.8
Outlook for Full Year
2021 Value-Added Sales Outlook Range
Net Sales Outlook
$
1,300.0
$
1,370.0
Less: Aluminum Value and Outside Service Provider Costs
(560.0
)
(590.0
)
Value-Added Sales Outlook
$
740.0
$
780.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005303/en/
Superior Investor Relations Clemens Denks (248) 234-7104
Investor.Relations@supind.com
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