VAN NUYS, Calif. — Superior Industries International has announced net income of $14.7 million, or 53 cents per diluted share, for the second quarter of 2011. This compares with net income of $10.1 million, or 38 cents per diluted share, in the second quarter of 2010.
Income from operations decreased to $12.9 million from $20.6 million in the second quarter a year ago.
“Net income for our second quarter improved over the prior year period, and total demand for our products remained steady, despite a substantial shipment decline to Toyota because of the earthquake and tsunami in Japan,” said Steven Borick, chairman, CEO and president. “Gross margin for the quarter primarily reflected a more challenging product mix, higher expense to keep our plants maintained and increased new program development cost. Changing product mix has been a challenge, as price competition, more stringent quality standards and new product ramp-ups all have pressured our gross margins. Higher maintenance cost is a consequence of running our factories at consistently high rates. Increased new program development cost reflects investment in our future. These challenges are expected to continue into the second half of 2011.”
Consolidated net sales increased 7 percent to $208.7 million from $194.6 million for the comparable period of 2010. Gross profit declined to 9 percent of net sales from 14 percent of net sales for the second quarter of 2010. Approximately two-thirds of the gross profit decline reflected higher unit manufacturing cost in 2011, principally increased labor and repairs and maintenance expense. Product mix changes and a more difficult to manufacture product mix have contributed to the higher manufacturing cost and gross margin decline. Consistently high capacity utilization has led to the need for increased maintenance spending, which was 36 percent higher in 2011. New program development cost was $1.4 million higher in the current year.
Income from operations decreased $7.7 million to $12.9 million, or 6 percent of net sales, from $20.6 million, or 11 percent of net sales, for the 2010 second quarter. On June 18, 2010, Superior sold its 50 percent ownership in its Hungarian joint venture for a total of $8.6 million in cash and other consideration, which resulted in a loss on sale of that investment in the second quarter of 2010 totaling $4.1 million. Income before income taxes and equity earnings was $13.6 million in the current quarter, compared with $16.3 million for the second quarter of 2010.
First Half Results
Net sales increased 16 percent to $398.3 million from $344.8 million for the first half of 2010. Gross profit was $36.4 million, or 9 percent of net sales, compared with $40.5 million, or 12 percent of net sales, in the prior year period.
Net income for the first half of 2011 was $22.8 million, or 83 cents per diluted share, compared with net income of $19 million, or 71 cents per diluted share, in the comparable period in 2010.
