<PAGE> 1
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 September 30, 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)
California 95-2594729
----------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7800 Woodley Avenue
Van Nuys, California 91406
-------------------- -----
(Address of principal executive offices) (Zip Code)
(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>
<S> <C>
Outstanding at
Class of Common Stock November 1, 1994
--------------------- ----------------
$.50 Par Value 29,672,035 Share
</TABLE>
<PAGE> 2
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
----------------------------
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 5,611 $ 8,274
Marketable securities, at the lower of
cost or market 21,978 28,314
Receivables, net 84,076 65,279
Inventories
Raw materials 14,571 10,391
Work in process 7,442 6,277
Finished goods 15,788 9,966
-------- --------
37,801 26,634
Other current assets 10,654 12,718
-------- --------
Total current assets 160,120 141,219
-------- --------
PROPERTY, PLANT AND EQUIPMENT, net 192,348 162,225
OTHER ASSETS 8,465 6,679
-------- --------
$360,933 $310,123
======== ========
Liabilities and Shareholders' Equity
CURRENT LIABILITIES:
Notes payable and current portion
of long-term debt $ 28,970 $ 2,555
Accounts payable 53,349 52,004
Accrued liabilities 21,797 19,957
Income taxes payable 2,389 1,475
-------- --------
Total current liabilities 106,505 75,991
-------- --------
LONG-TERM DEBT, net 31,712 34,004
OTHER LONG-TERM LIABILITIES 12,510 10,982
DEFERRED INCOME TAXES 12,292 12,277
SHAREHOLDERS' EQUITY 197,914 176,869
-------- --------
$360,933 $310,123
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 3
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1994 1993
----------- -----------
<S> <C> <C>
NET SALES $ 107,384 $ 82,813
Cost of Sales 81,246 63,175
------------ ------------
Gross Profit 26,138 19,638
Selling, general and administrative
expenses 4,843 3,916
----------- -----------
INCOME FROM OPERATIONS 21,295 15,722
Other Income (Expense):
Interest expense (949) (1,113)
Miscellaneous, net (360) 1,174
----------- -----------
(1,309) 61
----------- -----------
INCOME BEFORE INCOME TAXES 19,986 15,783
Income Taxes 7,344 6,497
----------- -----------
NET INCOME $ 12,642 $ 9,286
=========== ===========
EARNINGS PER SHARE $ 0.42 $ 0.30
=========== ===========
Weighted Average and Equivalent Shares
Outstanding 30,220,000 30,878,000
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 4
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
----------- -----------
<S> <C> <C>
NET SALES $ 334,028 $ 287,816
Cost of Sales 252,988 221,052
----------- -----------
Gross Profit 81,040 66,764
Selling, general and administrative
expenses 14,348 13,197
----------- -----------
INCOME FROM OPERATIONS 66,692 53,567
Other Income (Expense):
Interest expense (2,192) (3,605)
Miscellaneous, net 506 2,831
----------- -----------
(1,686) (774)
----------- -----------
INCOME BEFORE INCOME TAXES 65,006 52,793
Income Taxes 24,452 20,191
----------- -----------
NET INCOME $ 40,554 $ 32,602
=========== ===========
Earnings Per Share $ 1.33 $ 1.06
=========== ===========
Weighted Average and Equivalent Shares
Outstanding 30,428,000 30,670,000
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 5
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 37,426 $ 51,975
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings 26,400 -
Stock options exercised 1,482 1,866
Payments of long-term debt (2,277) (13,461)
Cash dividends (3,580) (2,507)
Repurchases of common stock (15,537) -
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 6,488 (14,102)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment, net (50,586) (29,005)
Purchases of marketable securities (24,998) (64,947)
Proceeds from sales of marketable securities 29,007 55,906
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (46,577) (38,046)
-------- --------
Net Decrease in Cash and Equivalents (2,663) (173)
Cash and Equivalents at Beginning of Period 8,274 11,789
-------- --------
Cash and Equivalents at End of Period $ 5,611 $ 11,616
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 6
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Common Stock Unrealized
--------------------- Additional Cumulative Loss on
Number of Paid-In Translation Marketable Retained
Shares Amount Capital Adjustment Securities Earnings Total
---------- ------- ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1993 30,061,414 $15,031 $ 70,789 $(442) $ - $91,491 $176,869
Net income - - - - - 40,554 40,554
Foreign currency
translation - - - 226 - - 226
Cash dividends
($.12/share) - - - - - (3,580) (3,580)
Repurchases of
common stock (483,600) (242) (15,295) - - - (15,537)
Stock options
exercised, including
related tax
benefit 90,021 45 1,437 - - - 1,482
Unrealized loss on
marketable securities - - - - (2,100) - (2,100)
---------- ------- -------- ----- ------- -------- --------
Balances at
September 30, 1994 29,667,835 $14,834 $ 56,931 $(216) $(2,100) $128,465 $197,914
========== ======= ======== ====== ======== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 7
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 fiancial
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 September 30, 1994, and the results of its operations and cash flows
for the three month and nine month periods ended September 30, 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. Interest paid, net of amounts capitalized, was $1,773,000 and taxes
paid was $22,870,000, for the nine months ended September 30, 1994.
4. During 1994 the Company adopted Statement of Financial Accounting
Standard No. 115, Accounting for Certain Investments in Debt and
Equity Securities (SFAS 115). Under the provisions of SFAS 115 the
Company is required to adjust the carrying value of its investment
portfolio to fair market value. Such adjustment, which resulted from
market fluctuations related to U. S. government agency securities,
amounted to $2.1 million and was recorded as a reduction to
shareholders' equity.
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<PAGE> 8
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
For The Three Months Ended September 30, 1994 1993 Over 1993
- - - - - ---------------------------------------- -------- -------- ---------
<S> <C> <C> <C>
OEM Cast Aluminum Road Wheels $ 97,982 $ 74,782 31.0%
Aftermarket 9,402 8,031 17.1%
-------- --------
$107,384 $ 82,813 29.7%
======== ========
For The Nine Months Ended September 30,
- - - - - ---------------------------------------
OEM Cast Aluminum Road Wheels $305,090 $259,228 17.7%
Aftermarket 28,938 28,588 1.2%
-------- --------
$334,028 $287,816 16.1%
======== ========
</TABLE>
Results of Operations
Net sales were $107.4 million and $334.0 million for the quarter and nine
months ended September 30, 1994, or 29.7 percent and 16.1 percent,
respectively, above comparable periods in 1993. Increased shipments in both
the OEM and aftermarket businesses contributed to this strong performance. OEM
aluminum road wheel shipments increased 26.0 percent and 18.4 percent for the
quarter and nine months ended September 30, 1994, respectively, over 1993
levels. In what is historically a slow quarter due to retooling by automotive
manufacturers for new model year changeovers, customer order levels remained
strong reflecting increases in North American auto production of approximately
12.7 percent for the quarter and 12.5 percent for the first nine months of
1994, as compared with 1993. Net sales in the aftermarket, without the impact
of the August 1993 sale of the Do-Ray mirror and light business, increased 20.7
percent and 18.9 percent for the quarter and nine months ended September 30,
1994, respectively, above comparable periods in 1993. Increases were achieved
predominantly in the roadwheel division as strong customer demand for the
Company's "Streetwear" product line continues to drive sales.
Gross margins were 24.3 percent for the quarter and nine months ended
September 30, 1994 versus 23.7 percent and 23.2 percent, respectively, in 1993.
Continued increasing customer order levels translated into greater production
and more efficient plant utilization, which was partially offset by the
Fayetteville, Arkansas plant expansion activities and the commencement of
operations at the new Chihuahua, Mexico facility.
-8-
<PAGE> 9
Selling, general and administrative expenses, as a percentage of net sales,
were 4.5 percent and 4.3 percent for the quarter and nine months ended
September 30, 1994, respectively, versus 4.7 percent and 4.6 percent,
respectively for the comparable periods in 1993, but increased in absolute
dollars. This increase reflects higher costs associated in managing the
Company's expanding business activities and legal costs associated with the
Company's successful defense of a patent litigation case during the quarter.
Interest expense decreased $164,000 and $1,413,000 for the quarter and
nine months ended September 30, 1994, respectively, from comparable periods in
1993 due to payments and prepayments against Senior notes in 1993, and interest
capitalized in 1994 related to OEM plant expansion activities. Partially
offsetting these reductions were additional interest costs associated with
higher borrowings under short term lines of credit.
Miscellaneous, net decreased $1,534,000 and $2,325,000 for the quarter
and nine months ended September 30, 1994, respectively, from similar levels in
1993, primarily as a result of pre production costs of $730,000 related to the
Chihuahua, Mexico facility and lower interest income due to the liquidation of
short term investments.
Liquidity and Capital Resources
Net cash provided by operating activities in the first nine months of
1994 was $37.4 million versus $52.0 million in 1993. Despite stronger
earnings, working capital requirements for plant expansion activities resulted
in reduced operating cash flows when compared to the prior year.
In 1994, cash was utilized to fund $50.6 million in capital
expenditures relating primarily to the new Chihuahua, Mexico OEM facility,
ongoing Fayetteville plant expansion and the new OEM chrome plating plant,
which is scheduled to commence operations near the end of the year.
Additionally, cash was utilized to repurchase 483,600 shares of the Company's
common stock pursuant to the previously announced stock repurchase program. To
supplement the daily cash requirements, the Company utilized $26.4 million of
short term lines of credit and liquidated $4.0 million of its short term
investment portfolio. The Company anticipates that it will substantially
reduce by year end the amounts borrowed under its short term credit facilities.
Working capital and current ratio were $53.6 million and 1.5:1 versus
$78.1 million and 2.0:1, at September 30, 1994 and December 31, 1993,
respectively. The decrease in working capital and current ratio is primarily the
result of internally funding OEM plant expansion and Company stock repurchase
activities. The long term debt to total capitalization ratio improved to 13.8
percent at the end of the quarter from 16.9 percent at the end of 1993.
-9-
<PAGE> 10
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------
(a) Exhibits - Exhibit 27, Financial Data Schedule
(b) Reports on Form 8-K - There were no reports filed during the quarter
ended September 30, 1994.
(This space intentionally left blank.)
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<PAGE> 11
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 11/11/94 /s/ LOUIS L. BORICK
-------- ---------------------------------------
Louis L. Borick
President and Chairman of the Board
DATE 11/11/94 /s/ R. JEFFREY ORNSTEIN
-------- ---------------------------------------
R. Jeffrey Ornstein
Vice President and CFO
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
EXHIBIT 27
FINANCIAL DATA SCHEDULE
(Dollars in thousands except share and per share amounts)
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1994 AND THE
UNAUDITED CONDENSED STATEMENT OF OPERATIONS FOR THE NINE MONTHS THEN ENDED, THIS
SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH UNAUDITED CONDENSED
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 5,611
<SECURITIES> 21,978
<RECEIVABLES> 85,174
<ALLOWANCES> (546)
<INVENTORY> 37,801
<CURRENT-ASSETS> 160,120
<PP&E> 292,908
<DEPRECIATION> (100,560)
<TOTAL-ASSETS> 360,933
<CURRENT-LIABILITIES> 106,505
<BONDS> 3,704
<COMMON> 14,834
0
0
<OTHER-SE> 183,080
<TOTAL-LIABILITY-AND-EQUITY> 360,933
<SALES> 334,028
<TOTAL-REVENUES> 335,452
<CGS> 252,988
<TOTAL-COSTS> 267,336
<OTHER-EXPENSES> 918<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,192
<INCOME-PRETAX> 65,006
<INCOME-TAX> 24,452
<INCOME-CONTINUING> 40,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,554
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.33
<FN>
<F1>OTHER EXPENSES INCLUDE MISCELLANEOUS EXPENSE
</FN>
</TABLE>
