Superior Industries International has reported financial results for the second quarter ended June 30, 2018.

“Our performance during the second quarter of 2018 reflects the continued execution of our plan, as we reported record value-added sales and record Adjusted EBITDA driven by the addition of our European operations, strong unit shipment levels and solid operating performance in both regions. While we are optimistic as we look forward to the remainder of the year, there is significant work ahead of us as we continue supporting our global customers with numerous product launches. Our priority is best-in-class execution while realizing additional efficiencies and capitalizing on the attractive tailwinds in our business,” said Don Stebbins, president and CEO.

On May 30, 2017, Superior closed the acquisition of its European operations. As a result, the company’s reporting for the second quarter and year-to-date 2017 includes one month of consolidated financials for the month of June 2017. This compares to 2018, which includes consolidated results with the European operations for the entire second quarter and year-to-date periods.

Wheel unit shipments were 5.6 million in the second quarter of 2018, an increase of 46.3 percent, compared to second quarter unit shipments of 3.8 million in the prior year period. The increase in unit shipments was primarily due to the inclusion of two additional months of the European operations, which drove 1.7 million units of improvement. Unit shipments in North America were relatively flat.

Net sales for the second quarter of 2018 were $389 million, compared to net sales of $240.6 million in the second quarter of 2017. The increase was driven by the inclusion of an additional two months of our European operations, an increase in aluminum prices and favorable mix in both regions.

Gross profit for the second quarter of 2018 was $53.6 million, compared to $20.1 million in the prior year period. Gross profit as a percentage of Value-Added Sales was 26.2 percent compared to 15.4 percent in the prior year period. The increase in gross profit as a percentage of value-added sales was due mainly to the non-recurring acquisition related items incurred in the prior year period and outlined in the subsequent tables in this press release, the inclusion of an additional two months of the European operations, and improvement in Superior’s North American operations.

The income tax provision for the second quarter ended June 30, 2018, was $4.8 million on pre-tax income of $12.9 million, representing an effective income tax rate of 37.1 percent. The effective tax rate for the second quarter ended June 30, 2018, was higher than the statutory rate due to the U.S. taxation of foreign earnings under the U.S. Tax Cuts and Jobs Act of 2017, including a $4 million impact from Section 951A of the act, offset in part by earnings in countries with rates lower than the U.S. statutory rate.

For the second quarter of 2018, the company reported net income of $8.1 million, and earnings per diluted share of 9 cents. This compares to a net loss of $7.3 million, or 41 cents loss per diluted share, in the second quarter of 2017.

Subsequent to the second quarter of 2018, on Aug. 7, 2018, Superior acquired an additional 447,821 shares of Superior Industries Europe AG (formerly known as Uniwheels AG), bringing Superior’s total ownership position to 97.8 percent.

Year-to-Date Results

Wheel unit shipments were 11.1 million for the first half of 2018, an increase of 67 percent, compared to unit shipments of 6.6 million in the prior year period. The increase in unit shipments was primarily due to the inclusion of an additional five months of the European operation’s units, which drove 4.4 million units of improvement, as well as slightly higher unit shipments in both regions.

Net sales for the first half of 2018 were $775.4 million, compared to net sales of $414.8 million in the first half of 2017. The increase was driven by the inclusion of an additional five months of the company’s European operations, an increase in aluminum prices, and favorable mix in both regions.

Gross profit for the first half of 2018 was $103.6 million compared to $39.3 million in the prior year period. Gross profit as a percentage of Value-Added Sales was 25.1 percent compared to 17.4 percent in the prior year period. The increase in gross profit was due mainly to the inclusion of an additional five months of the European operations, the non-recurring acquisition related items incurred in the prior year period and outlined in the subsequent tables in this press release, and improvement in Superior’s North American operations.

The provision for income taxes for the first half of 2018 was $8.2 million, resulting in an effective tax rate of 30.7 percent. This compares to an income tax benefit for the first half of 2017 of $1.5 million and an effective tax benefit of 25.6 percent in the prior year period.

For the first half of 2018, the company reported net income of $18.5 million, or 16 cents per diluted share. This compares to a net loss of $4.2 million, or a 28 cent loss per diluted share, in the first half of 2017.

2018 Outlook

Stebbins concluded, “Based on our performance during the first half of 2018 and our view for the second half of the year, we are revising our full year 2018 outlook for net sales, Adjusted EBITDA and our effective tax rate, while maintaining our outlook for units, value-added sales, capital expenditures and cash flow.”

Superior now expects net sales to be in the range of $1.52 billion to $1.56 billion, due primarily to higher aluminum prices. This compares to Superior’s previously issued outlook of $1.45 billion to $1.50 billion of net sales. Superior continues to expect unit shipments to be in the range of 21.25 million to 21.60 million. Value-added sales are expected to be in the range of $800 million to $835 million.