-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cl70Wr30Rm3Wsmz4vDIAbo6cB1CG+gyhpbTT7389bCRoRXnC9Bt3hYXBr+qRv4xc y31sIDdx6881Gh2feDzDkA== 0000950148-94-000363.txt : 19940817 0000950148-94-000363.hdr.sgml : 19940817 ACCESSION NUMBER: 0000950148-94-000363 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERIOR INDUSTRIES INTERNATIONAL INC CENTRAL INDEX KEY: 0000095552 STANDARD INDUSTRIAL CLASSIFICATION: 3714 IRS NUMBER: 952594729 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06615 FILM NUMBER: 94543804 BUSINESS ADDRESS: STREET 1: 7800 WOODLEY AVE CITY: VAN NUYS STATE: CA ZIP: 91406 BUSINESS PHONE: 8187814973 MAIL ADDRESS: STREET 1: 7800 WOODLEY AVENUE CITY: VAN NUYS STATE: CA ZIP: 91406 10-Q 1 FORM 10-Q FOR THE PERIOD ENDING 6/30/94 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 1-6615 SUPERIOR INDUSTRIES INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) California 95-2594729 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 7800 Woodley Avenue Van Nuys, California 91406 (Address of principal executive offices) (Zip Code)
(818) 781-4973 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if change since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Outstanding at Class of Common Stock August 1, 1994 --------------------- ----------------- $.50 Par Value 29,814,135 Shares
-1- 2 PART 1 FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (DOLLARS IN THOUSANDS)
JUNE 30, DECEMBER 31, 1994 1993 -------- ------------ Assets CURRENT ASSETS: Cash and equivalents $ 7,096 $ 8,274 Marketable securities, at the lower of cost or market 21,253 28,314 Receivables, net 80,044 65,279 Inventories Raw materials 12,879 10,391 Work in process 4,670 6,277 Finished goods 11,933 9,966 -------- -------- 29,482 26,634 Other current assets 12,312 12,718 -------- -------- Total current assets 150,187 141,219 PROPERTY, PLANT AND EQUIPMENT, net 181,413 162,225 OTHER ASSETS 8,540 6,679 -------- -------- $340,140 $310,123 ======== ======== Liabilities and Shareholders' Equity CURRENT LIABILITIES: Notes payable and current portion of long-term debt $ 9,701 $ 2,555 Accounts payable 53,830 52,004 Accrued liabilities 21,401 19,957 Income taxes payable 4,448 1,475 -------- -------- Total current liabilities 89,380 75,991 -------- -------- LONG-TERM DEBT, net 33,896 34,004 OTHER LONG-TERM LIABILITIES 11,971 10,982 DEFERRED INCOME TAXES 12,277 12,277 SHAREHOLDERS' EQUITY 192,616 176,869 -------- -------- $340,140 $310,123 ======== ========
See notes to consolidated condensed financial statements. -2- 3 SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Three Months Ended June 30, --------------------------- 1994 1993 -------- -------- Net Sales $120,706 $106,884 Cost of Sales 90,378 80,822 -------- -------- Gross Profit 30,328 26,062 Selling, general and administrative expenses 5,291 4,482 -------- -------- Income From Operations 25,037 21,580 Other Income (Expense) Interest expense (565) (1,241) Miscellaneous, net 362 693 -------- -------- (203) (548) -------- -------- Income Before Income Taxes 24,834 21,032 Income Taxes 9,437 7,782 -------- -------- Net Income $ 15,397 $ 13,250 ======== ======== Earnings Per Share $ 0.51 $ 0.43 ======== ======== Weighted Average and Equivalent Shares Outstanding 30,428,000 30,678,000 ========== ==========
See notes to consolidated condensed financial statements. -3- 4 SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Six Months Ended June 30, ---------------------- 1994 1993 -------- -------- Net Sales $226,644 $205,003 Cost of Sales 171,742 157,877 -------- -------- Gross Profit 54,902 47,126 Selling, general and administrative expenses 9,505 9,281 -------- -------- Income From Operations 45,397 37,845 Other Income (Expense) Interest expense (1,243) (2,492) Miscellaneous, net 866 1,657 -------- -------- (377) (835) -------- -------- Income Before Income Taxes 45,020 37,010 Income Taxes 17,108 13,694 -------- -------- Net Income $ 27,912 $ 23,316 ======== ======== Earnings Per Share $ 0.91 $ 0.76 ======== ======== Weighted Average and Equivalent Shares Outstanding 30,555,000 30,564,000 ========== ==========
See notes to consolidated condensed financial statements. -4- 5 SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (DOLLARS IN THOUSANDS)
Six Months Ended June 30, ------------------------- 1994 1993 -------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 28,724 $ 41,647 CASH FLOWS FROM FINANCING ACTIVITIES: Repurchases of common stock (9,760) - Short-term borrowings 7,125 - Cash dividends (2,245) (1,603) Stock options exercised 1,448 1,286 Payments of long-term debt (87) (137) -------- -------- NET CASH USED IN FINANCING ACTIVITIES (3,519) (454) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment, net (33,152) (11,531) Proceeds from sales of marketable securities 30,044 11,418 Purchases of marketable securities (23,275) (47,093) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (26,383) (47,206) Net Decrease in Cash and Equivalents (1,178) (6,013) Cash and Equivalents at Beginning of Period 8,274 11,789 -------- -------- Cash and Equivalents at End of Period $ 7,096 $ 5,776 ======== ========
See notes to consolidated condensed financial statements. -5- 6 SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
Common Stock Unrealized -------------------- Additional Cumulative Loss on Number of Paid-In Translation Marketable Retained Shares Amount Capital Adjustment Securities Earnings Total ---------- ------- ---------- ----------- ---------- -------- --------- Balances at December 31, 1993 30,061,414 $15,031 $70,789 $(442) $ - $ 91,491 $176,869 Net income - - - - - 27,912 27,912 Foreign currency translation - - - (8) - - (8) Cash dividends ($.075/share) - - - - - (2,245) (2,245) Repurchases of common stock (286,800) (144) (9,616) - - - (9,760) Stock options exercised, including related tax benefit 84,076 42 1,406 - - - 1,448 Unrealized Loss on marketable securities - - - - (1,600) - (1,600) ---------- ------- ------- ----- ------- -------- -------- Balances at June 30, 1994 29,858,690 $14,929 $62,579 $(450) $(1,600) $117,158 $192,616 ========== ======= ======= ===== ======= ======== ========
See notes to consolidated condensed financial statements. -6- 7 SUPERIOR INDUSTRIES INTERNATIONAL, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. During interim periods, the Company follows the accounting policies set forth in its Annual Report to Stockholders and applies appropriate interim financial reporting standards, including the use of estimated annual effective tax rates. Users of financial information produced for interim periods are encouraged to refer to the notes contained in the Annual Report to Stockholders when reviewing interim financial results. In the opinion of Management, the accompanying unaudited consolidated condensed financial statements of Superior Industries International, Inc. and subsidiaries (the "Company") contain all the adjustments necessary to present fairly the financial position of the Company as of June 30, 1994, and the results of its operations and cash flows for the three-month and six-month periods ended June 30, 1994 and 1993. 2. Per share amounts are based on the weighted average number of shares of common stock outstanding and common stock equivalents, when dilutive, during the period. 3. Interest paid, net of amounts capitalized, and taxes paid were $1,243,000 and $13,106,000, respectively, for the six months ended June 30, 1994. 4. During 1994 the Company adopted Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments in Debt and Equity Securities (SFAS 115). Under the provisions of SFAS 115 the Company is required to adjust the carrying value of its investment portfolio to fair market value. Such adjustment, which resulted from market fluctuations related to U. S. government agency securities, amounted to $1.6 million and was recorded as a reduction to shareholder's equity. -7- 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY OF SALES BY PRODUCT LINE
(000's) Increase (Decrease) For The Three Months Ended June 30, 1994 1993 Over 1993 - - ----------------------------------- -------- -------- ---------- OEM Cast Aluminum Road Wheels $109,329 $ 96,171 13.7% Aftermarket 11,377 10,713 6.2% -------- -------- $120,706 $106,884 12.9% ======== ======== For The Six Months Ended June 30, - - --------------------------------- OEM Cast Aluminum Road Wheels $207,108 $184,446 12.3% Aftermarket 19,536 20,557 (5.0)% -------- -------- $226,644 $205,003 10.6% ======== ========
RESULTS OF OPERATIONS Net sales were a record $120.7 million and $226.6 million for the quarter and six months ended June 30, 1994, or 12.9 percent and 10.6 percent, respectively, above comparable periods in 1993. Increased shipments of wheels in both the OEM and aftermarket businesses contributed to this strong performance. OEM aluminum road wheel shipments increased 15.9 percent and 15.3 percent for the quarter and six months ended June 30, 1994, respectively. Customer order levels remained strong, reflecting increases in North American auto production of approximately 11.9 percent for the first half of 1994 and the Company's attainment of a greater share in the expanding cast aluminum wheel market. Net sales in the aftermarket, without the impact of the August 1993 sale of the Do-Ray mirror and light business, increased 33.6 percent and 18.0 percent for the quarter and six months ended June 30, 1994, respectively, above comparable periods in 1993. Increases were achieved predominantly in the roadwheel division as strong customer demand for the Streetwear product line continues to fuel sales. Gross margins were 25.1 and 24.2 percent for the quarter and six months ended June 30, 1994 versus 24.4 percent and 23.0 percent, respectively, in 1993. Continued increasing customer order levels translated into greater production requirements and more efficient plant utilization resulting in incrementally higher margins. -8- 9 Selling, general and administrative expenses, in absolute dollars, increased for the quarter and six months ended June 30, 1994. This increase reflects higher compensation and information services costs associated with increased business levels, somewhat offset by the elimination of administrative costs, related to the divestiture of the Do-Ray operations. Interest expense decreased $676,000 and $1,249,000 for the quarter and six months ended June 30, 1994, respectively, from comparable periods in 1993 reflecting payments and prepayments against the Senior notes in 1993, as well as interest capitalized in 1994 related to OEM plant expansion activities. Miscellaneous, net decreased $331,000 and $791,000 for the quarter and six months ended June 30, 1994, respectively, from similar levels in 1993, reflecting lower interest income as the Company converted investment positions to fund plant expansion activities. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities in the first six months of 1994 was $28.7 million versus $41.6 million in 1993. Strong earnings and effective cash management accounted for the positive cash flow. In 1994, cash was utilized to fund $33.2 million in capital expenditures relating primarily to the new Chihuahua, Mexico OEM facility, the ongoing Fayetteville expansion and the new OEM chrome-plating plant. Cash was also utilized to repurchase 286,800 shares of the Company's common stock pursuant to the previously announced stock repurchase program. Supplementing operating cash flow was the utilization of $7.1 million from short-term lines of credit and a net $6.8 million liquidation of the investment portfolio. Subsequent to quarter end, the Company's Chihuahua plant commenced shipping wheels and the Company announced the acceleration of the second phase of construction, six months ahead of schedule, to meet customer demand. When completed, in early 1995, the Chihuahua facility will have capacity of over one million wheels annually. The second phase of the Fayetteville expansion and the new chrome-plating facility continue on schedule and will be completed during the second half of 1994. The Company anticipates funding these expansion activities from cash flow provided by existing working capital, ongoing operations and from funds available under its lines of credit facilities. Working capital and current ratio were $60.8 million and 1.7:1 versus $65.2 million and 1.9:1, at June 30, 1994 and December 31, 1993, respectively. Decrease in working capital and current ratio primarily reflects the purchase of fixed assets related to plant expansion activities. As expansion activity continues the current ratio will be negatively impacted as short-term investments are converted to long-term productive assets. The long-term debt to total capitalization ratio improved to 15.0 percent at the end of the quarter from 16.1 percent at the end of 1993. -9- 10 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On June 29, 1994, the Company prevailed in a civil action filed against the Company by Motor Wheel Corporation for alleged infringement of two Motor Wheel patents directed towards wheel making technology. In the United States District Court for the Eastern District of Michigan, a jury of six found that the Company had not infringed on either of Motor Wheel's patents, and therefore, Motor Wheel was not entitled to damages. The action was served against Superior by Motor Wheel on February 4, 1993. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - None (b) Reports on Form 8-K - There were no reports filed during the quarter ended June 30, 1994. (This space intentionally left blank.) -10- 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SUPERIOR INDUSTRIES INTERNATIONAL, INC. --------------------------------------- (Registrant) Date 08/12/94 /s/ Louis L. Borick --------------------------------------- Louis L. Borick President and Chairman of the Board Date 08/12/94 /s/ R. Jeffrey Ornstein --------------------------------------- R. Jeffrey Ornstein Vice President and CFO -11- -----END PRIVACY-ENHANCED MESSAGE-----