SOUTHFIELD, Mich. – Superior Industries International has reported its financial results for the full year and fourth quarter ended Dec. 28, 2014.
Don Stebbins, president and CEO, commented, “2014 was an important year for Superior as we strengthened the foundation of our company. We successfully transitioned production from our Rogers, Ark., facility to other, more cost-efficient facilities, began the launch of our newly constructed facility in Mexico, strengthened our management team and board of directors, and began the process of enhancing our competitiveness. We ended the year in a stronger position with some key investments and decisions behind us and are looking forward to 2015 as a year of solid improvement.”
Stebbins added, “We also remain committed to returning cash to shareholders through our dividend and share repurchase programs.”
Net income for the year was $8.8 million, or 33 cents per diluted share, as compared to net income of $22.8 million, or 83 cents per diluted share, in 2013. The company said this decline in net income was due to lower unit shipments, costs associated with the closing of its manufacturing facility in Rogers, Ark., the sale process of the company’s two aircraft and the impairment of an investment in an unconsolidated subsidiary located in India. In total, these costs were $12.2 million, $8.6 after tax, or 32 cents per share.
Consolidated net sales for 2014 were $745.4 million, a 6 percent decrease from $789.6 million for 2013, primarily reflecting lower unit volume and an unfavorable change in product mix. Unit shipments decreased 0.8 million to 11.1 million in 2014. Partially offsetting the decline in unit shipments was an increase in average selling price, due to higher aluminum prices generally passed through to the customer.
Gross profit for 2014 was $50.2 million, or 7 percent of net sales, compared to $64.1 million, or 8 percent of net sales, in 2013. The decrease reflects the lower unit shipments, and the aforementioned costs related to the closure of the Rogers, Ark., facility, which negatively impacted margin by 1 percent.
During the third quarter of this year, Superior completed a $30 million stock repurchase program originally approved by the board of directors during the first quarter of 2013. Subsequently, on Oct. 14, 2014, Superior’s board of directors approved a new stock repurchase program authorizing the repurchase of up to $30 million of the company’s common stock.
Fourth Quarter Results
For the fourth quarter ended Dec. 28, 2014, Superior reported net income of $1.4 million, equal to 5 cents per diluted share, compared $6.4 million, or 23 cents per diluted share, for the prior year period. Net income for the most recent quarter was impacted by lower unit shipments and costs associated with the closure of the manufacturing facility in Rogers, Ark., the sale process of the company’s remaining aircraft and the impairment of an investment in an unconsolidated subsidiary located in India. These costs totaled $6.9 million, $4.3 million after tax, or 16 cents per share. The net income decline was mitigated partially by a lower effective tax rate in the 2014 fourth quarter of 21 percent versus 48 percent in the prior year, due to the reversal of reserves for uncertain tax positions.
Consolidated net sales for the 2014 fourth quarter declined 3 percent to $186.7 million from $192.5 million in the fourth quarter of 2013. The decrease is attributable to reduced unit sales volume and an unfavorable change in product mix, offset partially by higher aluminum prices generally passed through to the customer. Unit shipments were 2.7 million in the fourth quarter of 2014 versus 2.9 million a year ago.
Gross profit for the 2014 fourth quarter decreased to $11.5 million, or 6 percent of sales, from $18.9 million, or 10 percent of sales, for the fourth quarter of 2013. The current year impact from the unit volume decline and costs associated with the Rogers facility closure was offset partially by reduced labor and benefit, maintenance and supply costs. Rogers facility closure costs were equal to 1 percent of sales.
Based on the current outlook, Superior reaffirms the 2015 guidance provided on Jan. 19, 2015. Superior expects to report net sales in the range of $725 million to $800 million.
Stebbins explained, “We enter 2015 with confidence and expect our performance will improve as we move through the balance of the year driven by three factors. First, we are ramping up production at our new Mexico facility throughout the year and aim to reach full capacity by the end of 2015. Second, we anticipate our shipment volumes to improve in the back half of the year. Third, we are actively implementing operational excellence initiatives across the business to enhance our competitive position. We look forward to building upon the progress achieved in 2014 and continuing to drive efficiencies across the business, making disciplined investments to produce sustainable, long-term growth.”