VAN NUYS, CA — Superior Industries International, Inc. has announced financial results for the second quarter of 2007, highlighted by solid increases in unit wheel shipments, net sales, gross margin and pre-tax income from continuing operations compared to the second quarter of 2006.
"The benefits of our hard work during the past several years to improve productivity, reduce costs and position Superior for success as a truly global company are becoming increasingly evident in our financial performance," said Chairman, President and CEO Steven Borick.
Net sales increased 16.1 percent to $255,217,000 compared to $219,880,000 for the second quarter of 2006, driven by a 3.7 percent increase in unit wheel shipments, a higher percentage of large-diameter wheels in the sales mix than in the prior year, and higher pass-through aluminum costs in selling prices.
Gross profit increased 48 percent to $13,578,000, or 5.3 percent of net sales, compared to $9,176,000, or 4.2 percent of net sales, for the second quarter of 2006.
"The many new aluminum wheel programs we have won in recent months have increased production volume in our plants and helped us improve manufacturing productivity. The steady ramp in production volume at our new facility in Chihuahua, Mexico, the most advanced large-diameter wheel casting plant in the world, also contributed to the increase in gross margin, as did the progress we made during the quarter toward resolving certain production issues at our Midwest plants. We remain on track at our new Chihuahua plant to achieve our production goals set for the balance of 2007," Borick said.
SG&A expenses increased to $9,037,000, or 3.5 percent of net sales, from $7,455,000, or 3.4 percent of net sales, in the same period a year ago. The principal increases were in stock-based compensation expense, professional fees related to legal and audit matters, and bonus accruals, which are based on a percentage of income.
Income before income taxes and equity earnings from joint ventures more than doubled to $5,121,000 from $2,254,000 for the same period a year ago. After an adjustment to eliminate intercompany profits in inventory, our equity in earnings of joint ventures was $731,000 compared to $1,129,000 a year earlier.
The income tax provision on income from continuing operations reflects an estimated effective tax rate of 41.3 percent, or $2,117,000, plus a required net adjustment to tax reserves totaling an additional $700,000. This resulted in an overall tax rate for the current quarter of 55 percent compared to 51.2 percent in 2006.
Net income from continuing operations was $3,035,000, or 11 cents per diluted share. This compares to net income from continuing operations for the second quarter of 2006 of $2,228,000, or 8 cents per diluted share. Also included in the second quarter of 2006 was a net loss from our discontinued suspension components business of $121,000, resulting in net income of $2,107,000, or 8 cents per diluted share, a year ago.
Working capital was approximately $242,900,000 including cash and cash equivalents of approximately $84,200,000. A year ago, working capital was $247,700,000 including cash and cash equivalents of $88,500,000. Superior has no debt.
Net sales increased 24 percent to $500,092,000 from $403,405,000 for the first six months of 2006. Unit wheel shipments increased 9.5 percent. SG&A expenses for this year’s first half increased to $15,952,000 from $12,850,000 for the first half of 2006. The company’s equity in earnings of joint ventures was $1,549,000 for the first six months of 2007 compared to $1,622,000 for the same period of 2006. Net income from continuing operations for the first six months of 2007 was $4,889,000, or 18 cents per diluted share, compared to $3,664,000, or 14 cents per diluted share, for the same period in 2006. The 2006 first half also included a net loss from the discontinued suspension components business of $447,000, or 2 cents per diluted share, resulting in net income for the 2006 period of $3,217,000, or 12 cents per diluted share.
