- Executed temporary and permanent cost reductions benefiting
2020 by ~$40M
- Successful shutdown and restart of all eight manufacturing
facilities
- Production schedules indicate strong demand for June and the
coming months
- Anticipate available liquidity at the end of Q2 2020 of $210
million to $230 million
- Remain in compliance with all lending covenants
Superior Industries International, Inc. (NYSE:SUP), one
of the world’s leading aluminum wheel suppliers for OEMs and the
European aftermarket, today provided a business update regarding
its current operating status.
As of June 1, 2020, Superior had resumed production at all its
facilities following the temporary suspension of operations in late
March and early April 2020 due to the COVID-19 pandemic. To ensure
the well-being of its employees, the Company is executing its Safe
Work Playbook across its footprint, which includes expanded
cleaning and sanitization, measures to ensure social distancing,
distribution of personal protective equipment (PPE) in-line with
government requirements, and daily temperature checks, among other
activities.
To date, the production restart process has been smooth. The
Company’s manufacturing operations have successfully managed
through the challenges of an extended shutdown and efficient
restart. Also, leading up to and during the restart, Superior
worked closely with its supply base, which continues to be
supportive and is effectively delivering all material and services
required for Superior’s production.
While Superior is experiencing strong demand from its customers
in both North America, specifically on pickup/SUV platforms, and in
Europe, the Company continues to extend and expand cost reduction
initiatives to align costs to the lower production environment. In
total, Superior has executed temporary and permanent cost
reductions including furloughs, wage reductions, temporary facility
closures, elimination of merit increases, reduced travel, personnel
restructurings, and use of government subsidies where available.
These cost initiatives are expected to benefit 2020 results by
approximately $40 million. Further, Superior is currently
utilizing, and may utilize again in the future, selective,
temporary facility closures to efficiently balance capacity with
production costs and inventory levels. In addition to these cost
reductions, the Company is taking other measures to improve cash
flow through targeted working capital initiatives and by reducing
capital expenditures.
“Superior, along with the entire automotive industry, has faced
an unprecedented operating environment over the last several
months. However, as an organization, our strong performance in the
first quarter along with the actions we have taken during the
second quarter to enhance our liquidity and financial profile,
position us well as we enter the second half of 2020,” commented
Majdi Abulaban, President and Chief Executive Officer of Superior.
“We continue to focus our efforts on 1) ensuring the health and
safety of our employees, 2) sustaining our liquidity position, 3)
managing costs to current industry production levels, and 4)
utilizing our production capacity efficiently. I remain positive
regarding our ability to safely and efficiently adapt our business
to meet customer demand as industry production normalizes.”
Second Quarter 2020 Performance
Industry production for the second quarter of 2020 is
anticipated to decline by approximately 70% in North America and
Europe compared to the same period in 20191. Based on Superior’s
current releases, the Company anticipates its unit shipments will
decline by approximately 60% for the second quarter, including
expectations for strong shipments in June. While the Company has
taken swift and decisive actions to reduce costs across the
organization, Superior’s second quarter financial results are
expected to be negatively impacted by lower unit shipments.
Accordingly, for the second quarter of 2020, Superior anticipates
net income to be negative and Adjusted EBITDA2 to be slightly
negative.
Cash and Liquidity Position
Superior continues to maintain a robust liquidity position,
supported by availability on revolving credit facilities and cash
on hand. At the end of the second quarter of 2020, Superior expects
net debt to be between $610M and $630M and total available
liquidity, including cash and available amounts under revolving
credit facilities to be between $210 million and $230 million.
Superior remains in full compliance with all lending covenants and
based on various outlook scenarios, does not anticipate any issues
meeting the covenants under the Company’s various lending
arrangements.
About Superior Industries
Superior is one of the world’s leading aluminum wheel suppliers.
Superior’s team collaborates and partners with customers to design,
engineer, and manufacture a wide variety of innovative and
high-quality products utilizing the latest lightweighting and
finishing technologies. Superior also maintains leading aftermarket
brands including 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.
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 “intend,” “may,” “should,” “could,” “will,” “expects,”
“expected,” “seeks to,” “anticipates,” “plans,” “believes,”
“estimates,” “intends,” “outlook”, “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 intention to submit a plan to the NYSE and
Superior’s ability to return to compliance of the continued listing
standards set forth in Section 802.01B of the NYSE’s Listed Company
Manual. 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.
Non-GAAP Financial Information
In addition to the results reported in accordance with GAAP,
this press release refers to “Adjusted EBITDA,” which Superior has
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 costs, certain hiring and
separation related costs, gains associated with early debt
extinguishment and accounts receivable factoring fees.
Management believes this non-GAAP measure is useful to
management and may be useful to investors in their analysis of
Superior’s financial position and results of operations. Further,
management uses this non-GAAP financial measure 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.
1 Based on IHS’ forecast as of May 16, 2020. EU based on Western
and Central EU. 2 See Non-GAAP Financial Information.
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version on businesswire.com: https://www.businesswire.com/news/home/20200623005234/en/
Superior Investor Relations: Troy Ford (248) 234-7104
Investor.Relations@supind.com
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