Superior Industries Report Q4 and Annual Results

Superior Industries International, one of the world’s largest suppliers of OE aluminium wheels, announced on March 21 the company’s financial results for the fourth quarter and the 2006 year.

For the three months to December 31, 2006, revenue increased 3.0 per cent to US$212,169,000 compared with $205,901,000 for the fourth quarter of 2005. Results during the quarter were, however, affected – to the tune of $3,256,000 – by start-up costs for the company’s new facility in Mexico, and restructuring expenses placed a further $964,000 strain on the quarter’s figure. Superior’s share of profits from its joint venture aluminium wheel manufacturing operation in Hungary were almost double that of a year earlier, at $2,198,000.

Net loss for the fourth quarter of 2006, taking the above factors into account, came to $4,827,000, or $0.18 per diluted share. In the fourth quarter of 2005 the company recorded a loss of $19,943,000, or $0.75 per diluted share.

President and CEO Steven Borick said, “Although Superior’s operating performance of 2006 did not measure up to our expectations, we made substantial progress in the multi-year restructuring program that is crucial to maintaining our leadership in the aluminium wheel business and achieving our long-term goals for growth and profitability. We have taken many decisive steps to reduce costs and realign capacity, including the closure of our chrome-plating operation in Fayetteville, Arkansas, capacity reductions at our Van Nuys, California, wheel plant, and closure of our Johnson City, Tennessee, wheel plant effective in the first quarter of 2007, and the sale of our unprofitable aluminium suspension component business.

“Construction of our newest plant in Chihuahua, Mexico, is now complete, financed entirely from operating cash flow. This new facility, the most advanced wheel casting plant in the world, was designed to accommodate the growing demand for large-diameter wheels (18-inches and over) and enhance our competitive position in this important market segment.

“We remain confident in our strategy and in Superior’s future. While it will take time for Superior’s financial performance to reflect the many improvements we have made and will continue to make, we have the resources and the discipline we need to work through this period of transition into a new era of global competition in the automobile industry.”

As of December 31, 2006, Superior’s working capital was approximately $233,500,000, including cash and short-term investments of approximately $78,100,000. Superior has no debt.

Twelve Months Results

For the twelve months ended December 31, 2006, revenue declined 1.8 per cent to $789,862,000 compared to $804,161,000 for 2005. Unit wheel shipments declined 11.9 per cent. The company’s share of profits from its joint venture aluminium wheel manufacturing operation in Hungary was $4,897,000 for 2006 compared to $5,176,000 for 2005.

Net loss for 2006 was $9,321,000, or $0.35 per diluted share. This compares to a net loss in 2005 of $5,836,000, or $0.22 per diluted share, which included income for the cumulative effect of the change in accounting principle of $1,225,000, or $0.05 per diluted share.