Superior Industries International reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2018.
“2018 marked our first full year as a more diversified and globally competitive company with the addition of our European operations,” said Timothy McQuay, executive chairman of Superior Industries. “Despite slightly weaker year-over-year industry production in both of our regions, the overall market remained relatively strong compared to historical levels. During the year, we made progress with our efforts to integrate our businesses, and we remain focused on fully leveraging the best practices of both teams to continue realizing the benefits of the acquisition of our European operations. In the second half of the year, we faced some hurdles due to lower industry volumes in Europe, electrical rate increases in Mexico, and launch challenges as we continued to see a shift towards more sophisticated finishes and larger diameter wheels, which is underscored by the increase in our Value-Added Sales per wheel.
“Looking forward to 2019, our expectation for the market is low-single digit industry production declines in both regions,” McQuay added. “Despite the production outlook, we remain fully committed to executing our strategy to enhance our operational efficiencies, specifically in North America, and supporting our global customer base to deliver shareholder value. To that end, we are continuing our search for a permanent CEO with a focus on finding an individual with a proven track record of operational success.”
Net sales for the fourth quarter of 2018 were $378.8 million, compared to net sales of $361.8 million in the fourth quarter of 2017. The company said this increase in the quarter was driven by higher aluminum prices, larger diameter wheels and a higher proportion of shipments from our European operations, partially offset by lower volumes in North America.
Gross profit for the fourth quarter of 2018 was $36.3 million, compared to $39.7 million in the prior year period.
The income tax provision for the fourth quarter ended Dec. 31, 2018, was $5.2 million on pre-tax income of $13.4 million. The provision for the quarter was impacted primarily by a valuation allowance on a deferred tax asset for interest expense, which was recorded during 2018. Superior determined the deferred tax asset for interest expense to not be allowed based on revised guidance from the IRS in November related to the Tax Cuts and Jobs Act.
For the fourth quarter of 2018, the company reported net income of $8.2 million, and earnings per diluted share of 61 cents, including the benefit of acquisition and one-time items totaling 77 cents per diluted share. This compares to a net loss of $4.6 million, or a 50-cent loss per diluted share, in the fourth quarter of 2017.
Full Year 2018 Results
Net sales for 2018 were $1.5 billion, compared to net sales of $1.1 billion in 2017.
Gross profit for 2018 was $163.5 million compared to $102.9 million in the prior year.
The provision for income taxes for 2018 was $6.3 million resulting in an effective tax rate of 19.5 percent for the year. This compares to an income tax provision for the year ended 2017 of $6.9 million.
For 2018, the company reported net income of $26 million, or earnings per diluted share of 29 cents, including the benefit of acquisition and one-time items totaling 34 cents per diluted share. This compares to a net loss of $6.2 million, or a loss per diluted share of $1.01, in 2017.
Based on industry outlook for North America and Europe as well as Superior’s portfolio of product and launches, Superior’s full year 2019 outlook is as follows:
- Superior expects net sales to be in the range of $1.42 billion to $1.47 billion, driven by unit shipments of 19.85 million to 20.30 million
- Value-Added Sales is expected to be in the range of $765 million to $805 million
- Adjusted EBITDA is expected to be in the range of $170 million to $185 million
- Cash flow from operations is expected to be between $125 million and $145 million
- Capital expenditures are expected to be approximately $85 million