Third Quarter Results
For the three months ended September 30, 2005, revenue decreased 5.9% to $187,618,000 from $199,328,000 for the third quarter of 2004. Wheel revenue declined 7.2% to $178,288,000 from $192,164,000, as unit wheel shipments declined 7.8%. Components revenue increased 30.2% to $9,330,000 from $7,164,000.
The net loss was $501,000, or $0.02 per share. This compares to net income of $5,475,000, or $0.20 per diluted share, for the third quarter of 2004.
The company's share of profits from its joint venture aluminum wheel manufacturing operation in Hungary declined to $1,289,000 for this year's third quarter compared to $1,693,000 a year ago due to lower shipment volumes.
The operating loss from Superior's aluminum suspension components business was $2,645,000 for this year's third quarter compared to an operating loss of $3,314,000 for the same period of 2004.
At September 30, 2005, working capital was $276,878,000, including cash and short-term investments of $117,422,000.
Nine Month Results
For the nine months ended September 30, 2005, revenue decreased 6.2% to $626,004,000 from $667,254,000 for the same period of 2004. Wheel revenue decreased 7.7% to $598,259,000 from $648,502,000. Unit wheel shipments declined 11.2%. Components revenue increased 48.0% to $27,745,000 from $18,752,000 for the same period last year.
Net income for the first nine months of 2005 was $13,279,000, or $0.50 per diluted share. This compares to net income of $32,726,000, or $1.22 per diluted share, for the first nine months of 2004.
The tax provision for the nine months of 2005 reflected an estimated tax rate of 23.0%, compared to 20.5% reported for the first half. The impact of increasing the nine-months to date tax rate increased the loss for the quarter by $433,000 or $0.02 per share. The tax provision for the first nine months of 2004 reflected an estimated tax rate of 34.5%. The principal factors impacting the lower rate for 2005 were the relationship of federal and state tax credits, permanent tax differences and foreign income, which is taxed at rates other than statutory, to a lower estimated pretax income for the year 2005.
Operations Review
"As anticipated, the steep decline in North American vehicle production this summer had a significant impact on Superior, as the deepest cuts occurred in some of our most important vehicle programs. Plant utilization, work schedules, and gross margin all were negatively affected, and pricing remained a critical issue for Superior and the OEM auto parts industry worldwide," said President and Chief Executive Officer Steven Borick.
Despite today's unprecedented competitive pressures, we are confident that we have the right strategy to secure Superior's future as a global company. Our cost reduction and automation initiatives are delivering results. Construction of our third facility in Mexico, which will set the world standard for cast aluminum wheel manufacturing, remains on schedule. We continue to win substantial new and replacement wheel supply programs, our aluminum components business continues to grow, and interesting expansion opportunities have emerged in developing markets. We expect a profitable fourth quarter, and we remain optimistic about the long-term outlook for Superior," Borick said.
Conference Call
Superior will host a conference call beginning at 10:00 AM PT (1:00 PM ET) today that will be broadcast on the company's website, www.supind.com. Investors, analysts, stockholders, news media and the general public are invited to listen to the webcast. The webcast replay will be available at this same internet address approximately one hour after the conclusion of the conference call.
In addition to reviewing the company's third quarter results, during the conference call the company plans to discuss other financial and operating matters. Additionally, the answers to questions posed to management during the call might disclose additional material information.
About Superior Industries
Superior supplies aluminum wheels and other aluminum automotive components to Ford, General Motors, DaimlerChrysler, Audi, BMW, Isuzu, Jaguar, Land Rover, Mazda, MG Rover, Mitsubishi, Nissan, Subaru, Toyota, and Volkswagen. For additional information, 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. These statements are based on current expectations, estimates and projections about the company'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 and risks discussed from time to time in the company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company 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.
Consolidated Statements of Income (Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------------------------------------------------
2005 2004 2005 2004
NET SALES $187,618 $199,328 $626,004 $667,254
Costs and Expenses
Cost of Sales 185,118 187,799 601,190 607,843
Selling and
Administrative
Expenses 5,591 5,290 15,914 17,170
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INCOME FROM OPERATIONS (3,091) 6,239 8,900 42,241
Equity in Earnings
of Joint Ventures 1,277 1,712 4,434 6,449
Interest Income, net 1,331 786 3,844 1,924
Miscellaneous Income
(Expense), net 396 (379) 68 (651)
----------------------------------------------------------------------
INCOME BEFORE INCOME
TAXES (87) 8,358 17,246 49,963
Income Tax Expense 414 2,883 3,967 17,237
----------------------------------------------------------------------
NET INCOME $(501) $5,475 $13,279 $32,726
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EARNINGS PER SHARE:
Basic $(0.02) $0.21 $0.50 $1.23
Diluted $(0.02) $0.20 $0.50 $1.22
----------------------------------------------------------------------
WEIGHTED AVERAGE AND
EQUIVALENT SHARES
OUTSTANDING:
Basic 26,610,000 26,630,000 26,616,000 26,666,000
Diluted 26,615,000 26,753,000 26,623,000 26,857,000
----------------------------------------------------------------------
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Consolidated Balance Sheets (Unaudited)
(Dollars in Thousands)
----------------------------------------------------------------------
September 30
-----------------------
2005 2004
----------------------------------------------------------------------
Current Assets $370,667 $399,765
Property, Plant and Equipment, net 310,723 274,602
Investments and Other Assets 67,508 62,103
----------------------------------------------------------------------
$748,898 $736,470
----------------------------------------------------------------------
Current Liabilities $93,789 $100,638
Long-Term Liabilities 52,438 44,416
Shareholders' Equity 602,671 591,416
----------------------------------------------------------------------
$748,898 $736,470
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