Superior Industries International has reported financial results for the fourth quarter and full year ended Dec. 31, 2022.
“The Superior team demonstrated tremendous operational strength and agility throughout 2022, driving impressive results in the face of substantial headwinds. Focused on executing our value creation roadmap, we delivered growth in value-added sales, robust Adjusted EBITDA and substantial margin expansion. Importantly, our ability to drive profitable growth despite lower OEM production volumes was enabled by ongoing operational improvements, strong demand for premium wheels, and pass through of cost inflation to customers. As a result, we delivered another year of profitable growth over market,” said Majdi Abulaban, president and CEO of Superior.
“As we head into 2023, the business environment remains challenging due to elevated input costs, diminished light vehicle production and volatile OEM production schedules, which will weigh on profitability. We will remain diligent in our efforts to drive operational efficiencies to mitigate these pressures,” Abulaban continued. “Over the long-term, we believe continued adoption of our advanced product portfolio and our differentiated ‘local for local’ footprint positions us favorably as light vehicle production returns to historical levels. Further, with $400 million of capital we recently attracted to our company, we are starting the year with a strengthened financial profile to execute on our growth strategy. We will continue to leverage our operational strength, advanced product portfolio and manufacturing footprint to deliver value creation in the new year, and beyond.”
Fourth Quarter Results
Net sales for the fourth quarter of 2022 were $402 million, compared to net sales of $368 million in the prior year period. Pass through of higher aluminum cost to customers contributed to the increase in net sales. Value-added sales, a non-GAAP financial measure, were $218 million for the fourth quarter of 2022, compared to $189 million in the prior year period, benefiting from pass through of cost inflation to customers. Content per wheel, a non-GAAP financial measure, was $62, up 26% compared to the prior year quarter, driven by the ongoing shift to larger wheels with more complex finishes and pass through of cost inflation to our customers.
Gross profit for the fourth quarter of 2022 was $55 million, compared to $21 million in the prior year period, because of the higher value-added sales.
For the fourth quarter of 2022, the company reported net earnings of $17 million, or earnings per diluted share of $0.25. This compares to a net loss of $4 million, and loss per diluted share of $0.48, in the fourth quarter of 2021.
The company reported cash flow provided by operating activities of $78 million in the fourth quarter of 2022, compared to cash flow provided by operating activities of $60 million during the fourth quarter of 2021. Free cash flow, a non-GAAP financial measure, for the fourth quarter was $63 million, compared to $40 million in the prior year period.
Full Year 2022 Results
Net sales for 2022 were $1,640 million, compared to net sales of $1,385 million in 2021. Pass through of higher aluminum cost to customers contributed to the increase in net sales. Value-added sales, a non-GAAP financial measure, were $771 million for 2022, compared to $754 million in the prior year, benefiting from pass through of cost inflation to customers. The increase in revenue was partially offset by unfavorable foreign exchange.
Gross profit for 2022 was $166 million, compared to $115 million in the prior year, because of the higher value-added sales.
For 2022, the company reported net income of $37 million, or earnings per diluted share of $0.02. This compares to net income of $4 million, or loss per diluted share of $1.17, in 2021.
Adjusted EBITDA, a non-GAAP financial measure, was $194 million, or 25% of value-added sales in 2022, which compares to $167 million, or 22% of value-added sales in 2021. The increase in Adjusted EBITDA was due to higher operating income.
Financial Position
As of Dec. 31, 2022, Superior had funded debt of $647 million and net debt, a non-GAAP financial measure, of $434 million, compared to funded debt of $616 million and net debt of $503 million as of the end of the prior year period. The decrease in net debt is due to the improvement in free cash flow in 2022 and the decrease in value of Superior’s Euro-denominated debt as the Euro weakened relative to the US Dollar.
Superior management assumes full year 2023 industry OEM production in its markets to grow at a low single digit percentage rate. As a result, Superior’s full year 2023 outlook is as follows:
| FY 2023 Outlook | ||
| Unit Shipments | 15.0 – 16.2 million | |
| Net Sales | $1.55 – $1.67 billion | |
| Value-added Sales | $755 – $815 million | |
| Adjusted EBITDA | $170 – $200 million | |
| Cash Flow from Operations | $110 – $130 million | |
| Capital Expenditures | ~$70 million |
Superior says it remains well-positioned to navigate the operating environment, including any inflationary pressures, foreign exchange headwinds, or possible recessionary trends.
