Superior Reports First Quarter 2022 Financial Results
Superior Industries International reported Q1 2022 financial results, highlighting a 12% increase in net sales to $401M. Net income was $10M, with EPS at $0.04. Adjusted EBITDA stood at $49.2M, maintaining a 26% margin. However, Value-Added Sales decreased 9% YoY to $189M. The company reduced Net Debt to $477M and expects OEM production growth amid ongoing supply chain challenges. Full-year guidance projects net sales between $1.58B - $1.71B and Adjusted EBITDA of $160M - $190M.
- Net sales increased 12% to $401M.
- Net income of $10M with EPS of $0.04.
- Reduced Net Debt to $477M.
- Strong cash flow from operations at $45M.
- Value-Added Sales decreased 9% YoY to $189M.
- Gross profit decreased to $41M from $43M YoY.
- Adjusted EBITDA decreased from $55M to $49M.
Achieved strong Adjusted EBITDA1 and Operating Cash Flow
Differentiated portfolio supporting Growth over Market2
First Quarter 2022 Financial Highlights:
-
Net Sales increased12% to$401M 9% YoY to$189M -
Portfolio delivered Growth over Market of
5% 2;5% Content per Wheel1 growth -
Net Income of
$10M $0.04 -
Adjusted EBITDA1 of
$49.2M 26% 3, despite lower unit shipments -
Cash Flow from Operations of
$45M -
Total Debt4 of
$611M $477M
| ($ in millions and units in thousands) | ||||||
| Three Months | ||||||
1Q 2022 |
1Q 2021 |
|||||
| Units | ||||||
|
2,291 |
|
2,453 |
|||
|
1,793 |
|
2,062 |
|||
| Global |
|
4,084 |
|
4,515 |
||
$ |
227.2 |
$ |
192.0 |
|||
|
173.3 |
|
166.2 |
|||
| Global | $ |
400.5 |
$ |
358.2 |
||
| Value-Added Sales (1) | ||||||
$ |
97.9 |
$ |
101.7 |
|||
|
91.5 |
|
105.6 |
|||
| Global | $ |
189.4 |
$ |
207.3 |
||
“Our team delivered solid results in the first quarter while navigating through a very challenging environment, impacted by the continued semiconductor shortage, supply chain disruption and cost inflation, as well as the Ukraine Conflict. As we execute our value creation roadmap, we have leveraged our innovative technologies and operational strength to deliver Adjusted EBITDA and profit margin levels at or above that of pre-pandemic levels against a backdrop of historically low industry production. To mitigate inflationary pressures, we actively engaged both our customers and suppliers to recover material cost inflation and execute on cost reduction opportunities. In addition, we generated strong cash flow from operations, enabling us to reduce our Net Debt level while making investments in our growing innovative capabilities,” commented
“Industry production levels have improved compared to the prior quarter yet remain impacted by the aforementioned headwinds, which we expect to continue through the remainder of 2022. Despite these headwinds, we are confident in our ability to further capitalize on secular trends and demand for premium content to further solidify Superior’s competitive position. As the year progresses, we are excited to continue enhancing our portfolio and make sustainable improvements to our operations through our R4TM Strategy5 to create long-term shareholder value,” concluded
First Quarter Results
Net sales for the first quarter of 2022 were
Gross profit for the first quarter of 2022 was
Selling, general, and administrative (“SG&A”) expenses for the first quarter of 2022 were
Operating income for the first quarter of 2022 was
The income tax provision for the first quarter of 2022 was
For the first quarter of 2022, the Company reported a net income of
Adjusted EBITDA, a non-GAAP financial measure, was
The Company reported net cash flow provided by operating activities of
Financial Position
As of
2022 Outlook
The Company reconfirmed its full year 2022 guidance, which assumes industry OEM production in its markets to grow at a mid- to high single digit percentage rate during the year. Based on this outlook for industry production, Superior’s full year 2022 outlook is as follows:
| FY 2022 Outlook | |||
| Unit Shipments | 16.4 - 17.7 million | ||
| Value-Added Sales | |||
| Adjusted EBITDA | |||
| Cash Flow from Operations | |||
| Capital Expenditures | ~ |
The industry production volume assumption reflects the supply chain challenges impacting the OEMs stemming from the continued semiconductor shortage. The expected impact from the Ukraine Conflict, throughout the second quarter of this year, is included in this outlook. Superior is positioned to benefit from additional production volumes and the associated earnings in the event industry volume develops better than assumed.
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 2022 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
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 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 light weighting and finishing technologies. Superior serves the European aftermarket with the brands ATS®, RIAL®, ALUTEC®, and ANZIO®. Headquartered in
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 and impairments of long-lived assets and investments, changes in fair value of redeemable preferred stock embedded derivative liability, acquisition and integration and 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, other costs, and services provided by outsourced service providers that are included in net sales. “Value-Added Sales Adjusted for FX," which is also referred to as “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 Foreign Exchange 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,” “foresee,” “intends,” “outlook,” “guidance,” “predicts,” “projects,” “projecting,” “potential,” “targeting,” “will likely result” or “continue,” or the negative of such terms and other comparable terminology. These statements also include, but are not limited to, the 2022 outlook included herein, the impact of COVID-19 and the resulting supply chain disruptions, as well as the Ukraine Conflict, on our future growth and earnings. 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
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 Exchange1; comparison vs. Q1 2022 North American and Western and Central European industry production per |
3 Adjusted EBITDA1 as % of Value-Added Sales1 |
4 Excluding Debt Issuance Cost |
5 For more information on Superior’s R4TM Strategy, please refer to slide 13 of Superior’s Fourth Quarter 2021 earnings presentation available on https://www.supind.com/cm/dpl/downloads/content/6137/Q4.2021_SUP_Earnings_Presentation_3.3.2022.pdf |
| Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
| (Dollars in Millions, Except Per Share Amounts) | ||||||||
Three Months |
||||||||
1Q 2022 |
1Q 2021 |
|||||||
$ |
400.5 |
|
$ |
358.2 |
|
|||
| Cost of Sales |
|
359.9 |
|
|
315.2 |
|
||
| Gross Profit | $ |
40.6 |
|
$ |
43.0 |
|
||
| SG&A Expenses |
|
17.0 |
|
|
17.3 |
|
||
| Impairment of |
- |
- |
||||||
| Income From Operations | $ |
23.6 |
|
$ |
25.7 |
|
||
| Interest Expense, net |
|
(10.0 |
) |
|
(10.3 |
) |
||
| Other Expense, net |
|
(0.1 |
) |
|
(1.5 |
) |
||
| Income Before Income Taxes | $ |
13.6 |
|
$ |
13.9 |
|
||
| Income Tax Provision |
|
(3.5 |
) |
|
(0.8 |
) |
||
| Net Income | $ |
10.1 |
|
$ |
13.1 |
|
||
| Earnings Per Share: | ||||||||
| Basic | $ |
0.04 |
|
$ |
0.19 |
|
||
| Diluted | $ |
0.04 |
|
$ |
0.18 |
|
||
| Weighted Average and Equivalent Shares Outstanding for EPS (in Thousands): |
||||||||
| Basic |
|
26,397 |
|
|
25,707 |
|
||
| Diluted |
|
27,414 |
|
|
26,687 |
|
||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| (Dollars in Millions) | ||||||||
| Current Assets | $ |
512.2 |
|
$ |
404.3 |
|
||
| Property, Plant and Equipment, net |
|
491.8 |
|
|
494.4 |
|
||
| Intangibles and Other Assets |
|
150.7 |
|
|
155.5 |
|
||
| Total Assets | $ |
1,154.9 |
|
$ |
1,054.1 |
|
||
| Current Liabilities | $ |
313.7 |
|
$ |
231.9 |
|
||
| Long-Term Liabilities |
|
684.1 |
|
|
691.7 |
|
||
| Redeemable Preferred Shares |
|
205.4 |
|
|
199.9 |
|
||
| European Non-controlling Redeemable Equity |
|
1.1 |
|
|
1.1 |
|
||
| Shareholders’ Deficit |
|
(49.3 |
) |
|
(70.4 |
) |
||
| Total Liabilities and Shareholders’ Deficit | $ |
1,154.9 |
|
$ |
1,054.1 |
|
||
| Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (Dollars in Millions) | ||||||||
| Three Months | ||||||||
1Q 2022 |
1Q 2021 |
|||||||
| Net Income | $ |
10.1 |
|
$ |
13.1 |
|
||
| Depreciation and Amortization |
|
24.1 |
|
|
25.4 |
|
||
| Income tax, Non-cash Changes |
|
2.0 |
|
|
(2.8 |
) |
||
| Stock-based Compensation |
|
2.6 |
|
|
1.8 |
|
||
| Amortization of Debt Issuance Costs |
|
1.2 |
|
|
0.9 |
|
||
| Other Non-cash Items |
|
0.3 |
|
|
(4.5 |
) |
||
| Changes in Operating Assets and Liabilities: | ||||||||
| Accounts Receivable |
|
(40.4 |
) |
|
(37.0 |
) |
||
| Inventories |
|
(36.6 |
) |
|
(14.7 |
) |
||
| Other Assets and Liabilities |
|
4.4 |
|
|
13.9 |
|
||
| Accounts Payable |
|
78.1 |
|
|
21.3 |
|
||
| Income Taxes |
|
(0.9 |
) |
|
0.8 |
|
||
| Cash Flow Provided By Operating Activities | $ |
45.0 |
|
$ |
18.2 |
|
||
| Capital Expenditures |
|
(18.0 |
) |
|
(10.5 |
) |
||
| Proceeds from Sale of Property, Plant and Equipment |
|
0.2 |
|
|
- |
|
||
$ |
(17.8 |
) |
$ |
(10.5 |
) |
|||
| Proceeds from the Issuance of Long-term Debt |
|
- |
|
|
1.7 |
|
||
| Debt Repayment |
|
(1.3 |
) |
|
(0.8 |
) |
||
| Cash Dividends |
|
(3.4 |
) |
|
(3.4 |
) |
||
| Payments Related to Tax Withholdings for Stock-Based Compensation |
|
(1.6 |
) |
|
(1.3 |
) |
||
| Finance Lease Payments |
|
(0.3 |
) |
|
(0.3 |
) |
||
| Cash Flow Used In Financing Activities | $ |
(6.7 |
) |
$ |
(4.2 |
) |
||
| Effect of Exchange Rate on Cash |
|
(0.3 |
) |
|
(2.1 |
) |
||
| Net Change in Cash | $ |
20.2 |
|
$ |
1.4 |
|
||
| Cash - Beginning |
|
113.5 |
|
|
152.4 |
|
||
| Cash - Ending | $ |
133.7 |
|
$ |
153.8 |
|
||
| Earnings Per Share Calculation (Unaudited) | ||||||||
| (Dollars and Outstanding Shares in Millions, Except Per Share Amounts) | ||||||||
Three Months |
||||||||
1Q 2022 |
1Q 2021 |
|||||||
| Basic EPS Calculation(1) | ||||||||
| Net Income | $ |
10.1 |
|
$ |
13.1 |
|
||
| Less: Accretion of Preferred Stock |
|
(5.5 |
) |
|
(4.9 |
) |
||
| Less: Redeemable Preferred Stock Dividends |
|
(3.4 |
) |
|
(3.4 |
) |
||
| Numerator | $ |
1.2 |
|
$ |
4.8 |
|
||
| Denominator: Weighted Avg. Shares Outstanding |
|
26.4 |
|
|
25.7 |
|
||
| Basic Earnings Per Share | $ |
0.04 |
|
$ |
0.19 |
|
||
| Diluted EPS Calculation(1) | ||||||||
| Net Income | $ |
10.1 |
|
$ |
13.1 |
|
||
| Less: Accretion of Preferred Stock |
|
(5.5 |
) |
|
(4.9 |
) |
||
| Less: Redeemable Preferred Stock Dividends |
|
(3.4 |
) |
|
(3.4 |
) |
||
| Numerator | $ |
1.2 |
|
$ |
4.8 |
|
||
| Weighted Avg. Shares Outstanding-Basic |
|
26.4 |
|
|
25.7 |
|
||
| Dilutive Stock Options and Restricted Stock Units |
|
1.0 |
|
|
1.0 |
|
||
| Denominator: Weighted Avg. Shares Outstanding |
|
27.4 |
|
|
26.7 |
|
||
| Diluted Earnings Per Share | $ |
0.04 |
|
$ |
0.18 |
|
||
(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 |
| Impact of Acquisition, Restructuring and Other Items on EPS (Unaudited) | ||||||||||
| (Dollars in Millions, Except Per Share Amounts) | ||||||||||
| Three Months | ||||||||||
| Before Tax Impact on Net Income | 1Q 2022 |
1Q 2021 |
Location on Inc. Stat. | |||||||
| Integration, Certain Hiring & Separation Costs | $ |
(1.0 |
) |
$ |
(3.4 |
) |
SG&A / COGS | |||
| Restructuring Costs |
|
- |
|
|
(0.1 |
) |
COGS / SG&A | |||
| Change in Fair Value of Preferred Derivative |
|
- |
|
|
(1.3 |
) |
Other Income/Expense | |||
| Total Before Tax Impact on Net Income | $ |
(1.0 |
) |
$ |
(4.8 |
) |
||||
| After Tax Impact on Net Income | $ |
(0.9 |
) |
$ |
(4.4 |
) |
||||
| Impact on Earnings Per Share | $ |
(0.04 |
) |
$ |
(0.17 |
) |
||||
Non-GAAP Financial Measures (Unaudited) (Dollars in Millions and Units in Thousands, Except Per Wheel) |
||||||||
| Value-Added Sales; Value-Added Sales Adjusted for Foreign Exchange; and Content per Wheel | Three Months |
|||||||
1Q 2022 |
1Q 2021 |
|||||||
$ |
400.5 |
|
$ |
358.2 |
|
|||
| Less: Aluminum, Other Costs, and Outside Service Provider Costs |
|
(211.1 |
) |
|
(150.9 |
) |
||
| Value-Added Sales | $ |
189.4 |
|
$ |
207.3 |
|
||
| Impact of Foreign Exchange Translation on Value-Added Sales |
|
6.8 |
|
|
- |
|
||
| Value-Added Sales Adjusted for Foreign Exchange | $ |
196.2 |
|
$ |
207.3 |
|
||
| Wheels Shipped |
|
4,084 |
|
|
4,515 |
|
||
| Content per Wheel | $ |
48.04 |
|
$ |
45.91 |
|||
| Free Cash Flow | Three Months | |||||||
1Q 2022 |
1Q 2021 |
|||||||
| Cash Flow Provided By Operating Activities | $ |
45.0 |
|
$ |
18.2 |
|
||
|
(17.8 |
) |
|
(10.5 |
) |
|||
| Less: Cash Payments for Non-debt Financing Activities |
|
(5.0 |
) |
|
(4.7 |
) |
||
| Free Cash Flow | $ |
22.2 |
|
$ |
3.0 |
|
||
| Adjusted EBITDA | Three Months | |||||||
1Q 2022 |
1Q 2021 |
|||||||
| Net Income | $ |
10.1 |
$ |
13.1 |
||||
| Adjusting Items: | ||||||||
| - Interest Expense, net |
|
10.0 |
|
10.3 |
||||
| - Income Tax Provision |
|
3.5 |
|
0.8 |
||||
| - Depreciation |
|
17.8 |
|
18.7 |
||||
| - Amortization |
|
6.2 |
|
6.7 |
||||
| - Integration, Restructuring, and Other |
|
1.0 |
|
4.8 |
||||
| - Factoring Fees |
|
0.6 |
|
0.5 |
||||
$ |
39.1 |
$ |
41.8 |
|||||
| Adjusted EBITDA | $ |
49.2 |
$ |
54.9 |
||||
| Net Debt | ||||||||
| Long Term Debt (Less Current Portion) (1) | $ |
605.0 |
|
$ |
610.2 |
|
||
| Short Term Debt |
|
6.0 |
|
|
6.1 |
|
||
| Total Debt (1) |
|
611.0 |
|
|
616.3 |
|
||
| Less: Cash and Cash Equivalents |
|
(133.7 |
) |
|
(113.5 |
) |
||
| Net Debt | $ |
477.3 |
|
$ |
502.8 |
|
||
| (1) Excluding Debt Issuance Cost | ||||||||
| Outlook for Full Year 2022 Value-Added Sales | ||||||||
| Net Sales Outlook | $ |
1,580.0 |
|
$ |
1,710.0 |
|
||
| Less: Aluminum, Other Costs, and Outside Service Provider Costs |
|
(800.0 |
) |
|
(870.0 |
) |
||
| Value-Added Sales Outlook | $ |
780.0 |
|
$ |
840.0 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220504005247/en/
Superior Investor Relations
(248) 234-7104
Investor.Relations@supind.com
Source:
FAQ
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