VAN NUYS, CA — Superior Industries International announced sharply improved operating results for the fourth quarter and 2007 versus the same periods of the prior year.

"The year 2007, our 50th year in business, was indeed a milestone year for Superior," said Chairman, President and CEO Steven Borick. "We made significant progress in our continuing programs to improve operating performance and strengthen our executive and operational management, while maintaining our cash dividend and liquid, debt-free balance sheet. The improvements in Superior’s financial performance for 2007 compared to 2006 indicate that our multi-year restructuring program is delivering the positive operating results we have been working hard to achieve." 

For the three months ended Dec. 31, 2007, consolidated net sales increased 8 percent to $229,243,000, compared to $212,169,000 for the fourth quarter of 2006, despite a reduction of $945,000 in wheel program development revenues. This revenue growth included a 1.5 percent increase in unit wheel shipments and a 7.1 percent increase in average selling prices, due principally to a higher percentage of larger diameter wheels in the sales mix than in the prior year.

Gross profit increased to $11,493,000, or 5 percent of net sales, for the fourth quarter of 2007. For the fourth quarter of 2006, gross profit was negative $948,000, or -0.4 percent of net sales, including $3.3 million of pre-production start-up costs at the new wheel plant in Mexico.

"We improved operational performance in 2007 and continued to increase production at our new manufacturing facility in Chihuahua, Mexico, especially of larger diameter aluminum wheels. As a result, in response to customer requests, we were able to quickly ramp up production on various new programs awarded to Superior. Many of these programs were awarded on a quick-to-market basis due to continued weakness within the industry,” Borick said.

SG&A expenses for the fourth quarter of 2007 were $5,442,000, or 2.4 percent of net sales. This compares to SG&A expenses of $6,818,000, or 3.2 percent of net sales, for the fourth quarter of 2006.

Income before income taxes and equity earnings from joint ventures was $7,753,000 for the fourth quarter of 2007, compared to a loss before income taxes and equity earnings from joint ventures of $6,224,000 for the same period a year earlier.

The effective income tax rates in the fourth quarter of both years are the result of adjusting the year-to-date September rates to those calculated for the full years 2007 and 2006. Accordingly, the fourth quarter of 2007 included a provision of $4,597,000, or 59.3 percent of pretax income, compared to a provision of $1,017,000, or 16.3 percent of a pretax loss in 2006. See comments below regarding a prior year restatement of income taxes.

Equity in earnings of the company’s joint venture aluminum wheel manufacturing facility in Hungary was $2,619,000 for the fourth quarter of 2007 compared to $2,254,000 a year earlier. "This was a highly creditable performance in a European market environment every bit as challenging as we face in the United States," Borick said.

Net income from continuing operations for the fourth quarter of 2007 was $5,775,000, or 22 cents per diluted share. This compares to a net loss from continuing operations for the fourth quarter of 2006 of $4,987,000, or 19 cents per diluted share. Also included in the fourth quarter of 2006 was a net loss from discontinued suspension components operations of $381,000, resulting in a net loss for the fourth quarter of 2006 of $5,368,000, or 20 cents per diluted share.

At Dec. 31, 2007, working capital was $260,483,000, including cash and cash equivalents of approximately $106,769,000. At Dec. 31, 2006, working capital was $233,483,000, including cash and short-term investments of $78,135,000. Superior has no debt.

Revenue for 2007 increased 21.1 percent to $956,892,000 from $789,862,000 for 2006. Unit wheel shipments increased 9.8 percent.

Gross profit for 2007 increased to $32,492,000, or 3.4 percent of net sales, from $8,740,000, or 1.1 percent of net sales, in the same period a year ago. Gross profit in 2006 included $10,054,000 of pre-production start-up costs at the company’s new plant in Mexico. SG&A expenses increased to $29,171,000 for 2007, including a labor-related legal settlement of $2,177,000 and approximately $1,000,000 in legal and audit fees related to a derivative lawsuit. SG&A expenses in 2006 were $25,679,000.

Income before income taxes and equity earnings from joint ventures was $10,200,000 for 2007. This compares to a loss before income taxes and equity earnings from joint ventures of $16,088,000 for 2006, which included a $4,470,000 charge for impairment of long-lived assets at Superior’s Johnson City, TN, plant, which ceased operations at the end of the first quarter of 2007. Equity in earnings of joint ventures was $5,355,000 for 2007, compared to $5,004,000 for 2006.

The effective tax rate on income (loss) from continuing operations for the year 2007 equated to a provision of $5,236,000, or 51.3 percent, compared to a provision of $742,000, or 4.6 percent, on the pretax loss in 2006. See comments below regarding a prior year restatement of income taxes.

Net income from continuing operations for 2007 was $10,319,000, or 39 cents per diluted share, compared to a net loss of $11,826,000, or 44 cents per diluted share, for 2006. Results for 2006 also included income from the discontinued suspension components business of $257,000, or 1 cent per diluted share, resulting in a net loss for 2006 of $11,569,000, or 43 cents per diluted share.

During the current quarter, it was determined that the company’s deferred tax liability related to timing differences of depreciation on fixed assets had not been appropriately reconciled, resulting in required adjustments to previously reported deferred tax liabilities and income tax provisions. Accordingly, the income tax provisions for the fourth quarter and annual periods of 2006 have been restated. The impact on the fourth quarter of 2006 was an additional provision of $569,000, or 2 cents per diluted share, and the impact on the annual results for 2006 was an additional provision of $2,276,000, or 8 cents per diluted share. Equity in earnings of joint ventures for both periods in 2006 was also restated to reflect differences between U.S. GAAP and Hungarian Accounting Law. For additional information related to these restatements, please refer to the company’s Current Report on Form 8-K filed today with the Securities and Exchange Commission.

For more information about Superior Industries, visit: www.supind.com.