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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
_________ to _________
Commission file number 1-6615
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 95-2594729
----------------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7800 Woodley Avenue 91406
Van Nuys, California ------------------
---------------------------------------- (Zip Code)
(Address of principal executive offices)
</TABLE>
(818) 781-4973
-----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
-----------------------------------------------------
(Former name, former address and former fiscal year,
if change since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days.
YES X NO
-------- --------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class of Common Stock May 5, 1994
--------------------- -----------------
<S> <C>
$.50 Par Value 29,879,990 Shares
</TABLE>
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PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1994 1993
--------- -----------
<S> <C> <C>
Assets
CURRENT ASSETS:
Cash and equivalents $ 6,294 $ 8,274
Marketable securities, at cost
which approximates market 28,079 28,314
Receivables, net 74,258 65,279
Inventories
Raw materials 12,401 10,391
Work in process 6,039 6,277
Finished goods 11,057 9,966
-------- ----------
29,497 26,634
Other current asets 10,945 12,718
-------- ----------
Total current assets 149,073 141,219
PROPERTY, PLANT AND EQUIPMENT, net 172,605 162,225
OTHER ASSETS 9,220 6,679
-------- ----------
$330,898 $310,123
======== ==========
Liabilities and Shareholders' Equity
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,577 $ 2,555
Accounts payable 52,546 52,004
Accrued liabilities 22,898 19,957
Income taxes payable 7,860 1,475
-------- ---------
Total current liabilities 85,881 75,991
-------- ---------
LONG-TERM DEBT, net 33,938 34,004
OTHER LONG-TERM LIABILITIES 11,431 10,982
DEFERRED INCOME TAXES 12,277 12,277
SHAREHOLDERS' EQUITY 187,371 176,869
-------- ---------
$330,898 $310,123
======== =========
</TABLE>
See notes to consolidated condensed financial statements.
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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1994 1993
-------- --------
<S> <C> <C>
Net Sales $105,938 $ 98,119
Cost of Sales 81,364 77,055
-------- --------
Gross Profit 24,574 21,064
Selling, general and
administrative expenses 4,214 4,799
-------- --------
Income From Operations 20,360 16,265
Other Income (Expense)
Interest expense (678) (1,252)
Miscellaneous, net 504 965
-------- --------
(174) (287)
-------- --------
Income Before Income Taxes 20,186 15,978
Income Taxes 7,671 5,912
-------- --------
Net Income $ 12,515 $ 10,066
======== ========
Earnings Per Share $ 0.41 $ 0.33
======== ========
Weighted Average and Equivalent
Shares Outstanding 30,828,000 30,414,000
========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1994 1993
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 17,863 $ 19,972
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock options exercised 1,097 269
Stock repurchases (2,201) -
Cash dividends (901) (802)
Payments of long-term debt (44) (44)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (2,049) (577)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of marketable securities 20,010 6,214
Purchases of marketable securities (19,775) (25,604)
Additions to property, plant and equipment, net (18,029) (4,201)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (17,794) (23,591)
Net Decrease in Cash and Equivalents (1,980) (4,196)
Cash and Equivalents at beginning of period 8,274 11,789
-------- --------
Cash and Equivalents at end of period $ 6,294 $ 7,593
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Common Stock
------------------------ Additional Cumulative
Number of Paid-In Translation Retained
Shares Amount Capital Adjustment Earnings Total
---------- ------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1993 30,061,414 $15,031 $70,789 $(442) $91,491 $176,869
Net income - - - - 12,515 12,515
Foreign currency
translation - - - (8) - (8)
Cash dividends
($.03/share) - - - - (901) (901)
Repurchases of
common stock (57,500) (28) (2,173) - - (2,201)
Stock options
exercised, including
related tax
benefit 64,177 33 1,064 - - 1,097
---------- ------- ------- ------ -------- --------
Balances at
March 31, 1994 30,068,091 $15,036 $69,680 $(450) $103,105 $187,371
========== ======= ======= ====== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. During interim periods, the Company follows the accounting
policies set forth in its Annual Report to
Stockholders and applies appropriate interim financial
reporting standards, including the use of estimated annual
effective tax rates. Users of financial information
produced for interim periods are encouraged to refer to
the notes contained in the Annual Report to Stockholders
when reviewing interim financial results.
In the opinion of Management, the accompanying unaudited
consolidated condensed financial statements of Superior
Industries International, Inc. and subsidiaries (the
"Company") contain all the adjustments necessary to
present fairly the financial position of the Company as of
March 31, 1994 and the results of operations and cash
flows for the three months ended March 31, 1994 and 1993.
2. Per share amounts are based on the weighted average number
of shares of common stock outstanding and common stock
equivalents, when dilutive, during the period.
3. On May 21, 1993, the Board of Directors declared a
three-for-two stock split, payable July 20, 1993 to
shareholders of record as of July 6, 1993. All per share
data in the unaudited consolidated condensed financial
statements have been restated to reflect the three-for-two
stock split.
4. Interest paid, net of amounts capitalized and taxes paid were
$260,000 and $882,000, respectively, for the three months
ended March 31, 1994.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Summary of Sales by Product Line
<TABLE>
<CAPTION>
(000's) Increase
(Decrease)
For The Three Months Ended March 31, 1994 1993 Over 1993
------------------------------------ --------- ------- ----------
<S> <C> <C> <C>
OEM Cast Aluminum Road Wheels $ 97,779 $88,275 10.8%
Aftermarket 8,159 9,844 (17.1%)
-------- -------
$105,938 $98,119 8.0%
</TABLE> ======== =======
Results of Operations
Net sales for the quarter ended March 31, 1994 were $105.9 million
compared with $98.1 million in 1993. Despite a major earthquake
in California and severe winter storms in the Midwest and East
Coast, OEM net sales increased 10.8 percent over 1993 to $97.8
million. The increase in OEM net sales represented a 14.7 percent
increase in aluminum road wheel shipments as customer order levels
continued to strengthen reflecting increases in North American auto
production of approximately 12.3 percent in the first quarter.
Partially offsetting increased unit shipments were reduced selling
prices caused by the Company's adjustment of the aluminum content
of selling prices to current market.
Net sales in the Aftermarket business decreased 17.1 percent from
1993. Continuing aftermarket product net sales, without the
impact of the August, 1993 sale of the Company's Canadian
aftermarket mirror and light business, operating under the
trade name "Do-Ray", increased 1.5 percent over 1993.
Gross profit increased to 23.2 percent compared to 21.5 percent
in 1993. Higher customer order levels translated into greater
production requirements and more efficient and higher plant
utilization resulting in incrementally higher margins.
The company achieved these margins despite severe winter weather
conditions in the Midwest and a $1.1 million charge for
costs associated with the January 17th Northridge earthquake,
which impacted the Company's Van Nuys, California facility.
The Company's Van Nuys facility was back in full production a
few days after the earthquake. In spite of these two negative and
uncontrollable factors, the company was able to substantially mitigate
the impact on production and meet all customer shipping requirements.
Selling, general and administrative expenses, measured as a percentage
of net sales, decreased to 4.0 percent for the quarter versus 4.9 percent
in 1993 and decreased $585,000 in absolute dollars. This reduction
reflects the divestiture of the Do-Ray operations, reduced advertising
costs and continuing cost containment programs.
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Interest expense decreased $574,000 in the first quarter of 1994
compared to 1993 reflecting required payments and prepayments
against the Company's Senior notes in 1993 as well as interest
capitalized in 1994 related to the Company's OEM plant expansion
activities.
Miscellaneous, net decreased $461,000 primarily reflecting
lower interest income as the Company converted cash and short-term
investments into long-term productive assets for plant expansion
activities.
Liquidity and Capital Resources
Net cash provided by operating activities in the first quarter
of 1994 was $17.9 million versus $20.0 million in 1993.
Positive cash flow reflected strong earnings and effective
management of working capital resulting from expanded business
activities.
In 1994, cash was utilized for $18.0 million in capital
expenditures relating to the new Chihuahua, Mexico OEM facility and
the ongoing Fayetteville expansion. Both projects continue to be on
schedule with the Chihuahua plant scheduled to begin operations in
the second quarter and the Fayetteville expansion scheduled for
completion during the second half of 1994. Cash was also utilized
to repurchase and retire 57,500 shares of the Company's common stock
for $2.2 million. Remaining cash flow was temporarily invested in
marketable securities.
Working capital and current ratio were $63.2 million and 1.7:1
versus $65.2 million and 1.9:1, at March 31, 1994 and December 31,
1993, respectively. Decrease in working capital primarily
reflects the purchase of fixed assets related to plant expansion
activities. As expansion activities continue, including the
chrome-plating plant currently under construction, these ratios
will continue to be impacted. The long-term debt to total
capitalization ratio improved to 15.3 percent at the end of the
quarter from 16.1 percent at the end of 1993.
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - There were no reports filed during the
quarter ended March 31, 1994.
(This space intentionally left blank.)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
---------------------------------------
(Registrant)
Date 05/16/94 /s/ LOUIS L. BORICK
---------------------------------------
Louis L. Borick
President and Chairman of the Board
Date 05/16/94 /S/ R. JEFFREY ORNSTEIN
---------------------------------------
R. Jeffrey Ornstein
Vice President and CFO
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