-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SiL6S8tTU2iJ2370XCtBGT3r1XkXzu1Gs+nJMnsY4w7VOgglr99S109vOLbKc8rG voRkwG8b4QoXHOEN3HLG6g== 0000950148-96-002439.txt : 19961106 0000950148-96-002439.hdr.sgml : 19961106 ACCESSION NUMBER: 0000950148-96-002439 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERIOR INDUSTRIES INTERNATIONAL INC CENTRAL INDEX KEY: 0000095552 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [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: 96654004 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 ENDED SEPTEMBER 30, 1996 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 September 30, 1996 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 91406 Van Nuys, California (Zip Code) (Address of principal executive offices) (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 October 28, 1996 $.50 Par Value 28,382,216 Shares 1 2 PART 1 FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (DOLLARS IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ ASSETS CURRENT ASSETS: Cash and equivalents $ 27,440 $ 3,366 Short-term investments, at the lower of cost or market 5,062 7,813 Receivables, net 70,349 70,889 Inventories Raw materials 15,200 18,485 Work in process 11,685 12,815 Finished goods 15,503 22,523 -------- -------- 42,388 53,823 Other current assets 7,003 6,768 -------- -------- Total current assets 152,242 142,659 -------- -------- PROPERTY, PLANT AND EQUIPMENT, net 164,472 177,538 OTHER ASSETS 32,001 21,573 -------- -------- $348,715 $341,770 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable and current portion of long-term debt $ 8,824 $ 13,628 Accounts payable 36,720 46,920 Accrued liabilities 30,249 21,198 -------- -------- Total current liabilities 75,793 81,746 -------- -------- LONG-TERM DEBT, net 5,657 5,814 OTHER LONG-TERM LIABILITIES 17,350 17,207 DEFERRED INCOME TAXES 8,050 7,850 SHAREHOLDERS' EQUITY 241,865 229,153 -------- -------- $348,715 $341,770 ======== ========
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 September 30, 1996 1995 ----------- ----------- NET SALES $ 120,447 $ 113,176 Cost of Sales 96,038 92,286 ----------- ----------- Gross Profit 24,409 20,890 Selling, general and administrative expenses 4,587 4,507 ----------- ----------- INCOME FROM OPERATIONS 19,822 16,383 Other Expense: Interest expense (236) (959) Interest income 232 277 Miscellaneous, net (1,750) (2,661) ----------- ----------- (1,754) (3,343) ----------- ----------- INCOME BEFORE INCOME TAXES 18,068 13,040 Income Taxes 6,640 4,755 ----------- ----------- NET INCOME $ 11,428 $ 8,285 =========== =========== EARNINGS PER SHARE $ 0.40 $ 0.28 =========== =========== Weighted Average and Equivalent Shares Outstanding 28,605,000 30,123,000 =========== ===========
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)
Nine Months Ended September 30, 1996 1995 ---------- ---------- NET SALES $ 379,462 $ 390,297 Cost of Sales 302,973 303,788 ---------- ---------- Gross Profit 76,489 86,509 Selling, general and administrative expenses 14,948 15,203 ---------- ---------- INCOME FROM OPERATIONS 61,541 71,306 Other Income (Expense): Interest expense (1,139) (2,529) Interest income 592 993 Miscellaneous, net (7,293) (4,466) ---------- ---------- (7,840) (6,002) ---------- ---------- INCOME BEFORE INCOME TAXES 53,701 65,304 Income Taxes 19,735 24,595 ---------- ---------- NET INCOME $ 33,966 $ 40,709 ========== ========== EARNINGS PER SHARE $ 1.18 $ 1.36 ========== ========== Weighted Average and Equivalent Shares Outstanding 28,882,000 30,007,000 ========== ==========
See notes to consolidated condensed financial statements. 4 5 SUPERIOR INDUSTRIES INTERNATIONAL, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (DOLLARS IN THOUSANDS)
Nine Months Ended September 30, 1996 1995 -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 68,947 $ 31,889 CASH FLOWS FROM FINANCING ACTIVITIES: Short-term borrowings (4,800) (16,442) Stock options exercised 533 2,756 Payments of long-term debt (161) (5,773) Cash dividends (4,872) (4,298) Repurchases of common stock (17,197) (2,534) -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (26,497) (26,291) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment, net (7,490) (18,501) Proceeds from sales of marketable securities 364 15,071 Investment in Hungarian joint venture (11,250) (4,775) Purchases of marketable securities - - -------- -------- NET CASH USED IN INVESTING ACTIVITIES (18,376) (8,205) -------- -------- Net Increase/(Decrease) in Cash and Equivalents 24,074 (2,607) Cash and Equivalents at Beginning of Period 3,366 5,884 -------- -------- Cash and Equivalents at End of Period $ 27,440 $ 3,277 ======== ========
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)
Valuation Common Stock Adjustment ------------------------ Additional Cumulative to Number of Paid-In Translation Marketable Retained Shares Amount Capital Adjustment Securities Earnings Total ----------- -------- --------- ----------- ---------- ---------- -------- Balances at December 31, 1995 29,029,007 $14,514 $38,911 $(13,828) $(652) $190,208 $229,153 Net income - - - - - 33,966 33,966 Foreign currency translation, net of related deferred income taxes - - - 380 - - 380 Cash dividends ($.17/share) - - - - - (4,872) (4,872) Repurchases of common stock (665,600) (332) (16,865) - - - (17,197) Stock options exercised, including related tax benefit 31,809 16 517 - - - 533 Valuation adjustment to marketable securities - - - - (98) - (98) ---------- ------- -------- -------- ----- -------- -------- Balances at September 30, 1996 28,395,216 $14,198 $ 22,563 $(13,448) $(750) $219,302 $241,865 ========== ======= ======== ======== ===== ======== ========
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 adjustments necessary, which are of a normal and recurring nature, to present fairly the financial position of the Company as of September 30, 1996, and the results of its operations and cash flows for the three month and nine month periods ended September 30, 1996 and 1995. 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. Interim financial reporting standards require management to make estimates that are based on assumptions regarding the outcome of future events and circumstances not known at the present time. Inevitably, some assumptions may not materialize and unanticipated events and circumstances may occur which vary from those estimates and such variations may significantly affect the Company's future results. 4. Interest paid, net of amounts capitalized, was $844,000 and $2,529,000 for the nine months ended September 30, 1996, and September 30, 1995, respectively. Interest amounts capitalized were $0 and $739,000 for the nine months ended September 30, 1996 and September 30, 1995, respectively. Taxes paid were $16,402,000 and $23,297,000 for the nine months ended September 30, 1996 and September 30, 1995, respectively. 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 September 30, 1996 1995 Over 1995 - ---------------------------------------- -------------- --------------- -------------- OEM CAST ALUMINUM ROAD WHEELS $ 113,130 $ 105,457 7.3% AFTERMARKET 7.317 7,719 (5.2)% -------------- --------------- $ 120,447 $ 113,176 6.4% ============== =============== For the Nine Months Ended September 30, - --------------------------------------- OEM CAST ALUMINUM ROAD WHEELS $ 354,479 $ 362,338 (2.2)% AFTERMARKET 24,983 27,959 (10.6)% -------------- --------------- $ 379,462 $ 390,297 (2.8)% ============== ===============
RESULTS OF OPERATIONS OEM net sales were $113.1 million for the quarter ended September 30, 1996 representing an increase of 7.3 percent over the comparable period in 1995. Higher net sales resulted from higher unit shipments. OEM net sales declined 2.2 percent to $354.5 million for the nine months compared to 1995. The decline in year to date net sales from the comparable period in 1995 reflect reduced prices due to lower aluminum costs which flow through to our major OEM customers. Unit shipments of OEM cast aluminum wheels increased 16.4 percent for the quarter and increased 6.7 percent for the nine months compared to prior year levels. Installation of aluminum wheels on domestic automobiles and light trucks increased as overall production of these vehicles increased 6.9 percent for the quarter but decreased 1.7 percent for the nine months ended September 1996 compared to the same period last year. Wheel shipments to customers other than Ford and GM were also up compared to the related period last year. The result of this increase brings the international portion of our business to nearly 6 percent of our total OEM business. Net sales in the aftermarket business decreased 5.2 percent and 10.6 percent for the quarter and nine months ended September 30, 1996, respectively, from comparable periods in 1995. This is attributable to a general slowdown in the entire automotive aftermarket accessory business. 8 9 Gross margins were 20.3 percent and 20.2 percent for the quarter and nine months ended September 30, 1996, respectively, versus 18.5 and 22.2 percent for the comparable periods in 1995. Increased gross profit margins reflect the increase in our plant utilization rate over the same quarter last year. Selling, general and administrative expenses, as a percentage of net sales, are about flat with last year's three and nine month periods at approximately 3.9 percent. For the nine months ended September 30, 1996, selling, general and administrative expenses, have declined $255,000 as a result of the company's continued cost controls. Interest expense for the third quarter and nine months ended September 1996 were $236,000 and $1,139,000 respectively. This is a decrease of $723,000 and $1,390,000 respectively, from the same periods last year due to payments of senior debt bearing interest rates of 10.22 percent and 9.31 percent. Also contributing to the decline in interest expense is the ability to generate sufficient cash to manage working capital requirements without short-term borrowing. Interest income for the quarter ended September 30, 1996 was flat with last year. For the nine months ended September 30, 1996 interest income is down $0.4 million reflecting the working capital needs earlier in the year to fund our joint venture in Hungary and repurchases of common stock. Miscellaneous expense, net decreased $911,000 reflecting lower pre-production costs in the chrome plating plant for the quarter. The nine month period ended September 30, 1996 shows an increase of $2.8 million over the same period in 1995. This reflects the major efforts earlier in this year to achieve commercial viability in the chrome plant. These efforts are now yielding increased production. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $68.9 million for the nine months ended September 30, 1996. Cash flows were favorably impacted by reducing receivables and inventory. Cash was utilized to fund $11.3 million of capital contributions to its joint venture with German-based Otto Fuchs Metallwerke, in Tatabanya, Hungary. The joint venture, which will operate under the name Suoftec Light Metal Products KFT will produce both light weight forged and cast aluminum wheels to the European automotive industry. Cash was also employed to reduce outstanding lines of credit of approximately $4.8 million and repurchase $17.2 million of the Company's common stock, pursuant to its 1996 stock repurchase program. Working capital and current ratio were $76.4 million and 2.1:1 versus $60.9 million and 1.8:1 at September 30, 1996 and December 31, 1995 respectively. Long-term debt to total capitalization ratio improved to 2.3 percent at quarter end versus 2.5 percent at year end. 9 10 USE OF FORWARD LOOKING STATEMENTS Certain statements included in this report which are not historical in nature are forward looking statements within the meaning of the Private Securities Legislation Act of 1995. Forward looking statements regarding the Company's future performance and financial results are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in forward looking statements due to a variety of factors. Factors that may impact such forward looking statements include, among others, changes in general economic conditions and the success of the Company's strategic and operating plans. 10 11 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - Exhibit 27, Financial Data Schedule (b) Reports on Form 8-K - There were no reports filed during the quarter ended September 30, 1996. (This space intentionally left blank.) 11 12 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 11/01/96 /s/ Louis L. Borick ------------------------------------ Louis L. Borick President and Chairman of the Board Date 11/01/96 /s/ R. Jeffrey Ornstein ------------------------------------- R. Jeffrey Ornstein Vice President and CFO 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED, CONSOLIDATED CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 1996 AND THE UNAUDITED, CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS THEN ENDED. THIS SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH UNAUDITED, CONSOLIDATED CONDENSED FINANCIAL STATEMENTS. 9-MOS SEP-30-1996 SEP-30-1996 27,440 5,062 70,349 1,236 42,388 152,242 164,472 151,408 384,715 75,793 2,806 0 0 14,198 227,667 348,715 379,462 380,054 302,973 317,921 7,293 0 1,139 53,701 19,735 33,966 0 0 0 33,966 1.18 0
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