<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 MARCH 31, 1996
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 91406
VAN NUYS, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(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 6, 1996
--------------------- ----------------
<S> <C>
$.50 PAR VALUE 28,777,161
</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,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 12,688 $ 3,366
Marketable securities, at the lower of
cost or market 6,347 7,813
Receivables, net 70,989 70,889
Inventories
Raw materials 17,554 18,485
Work in process 12,604 12,815
Finished goods 21,028 22,523
-------- --------
51,186 53,823
Other current assets 6,277 6,768
-------- --------
Total current assets 147,487 142,659
-------- --------
PROPERTY, PLANT AND EQUIPMENT, net 174,477 177,538
OTHER ASSETS 21,385 21,573
-------- --------
$343,349 $341,770
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion
of long-term debt $ 8,824 $ 13,628
Accounts payable 42,221 46,920
Accrued liabilities 22,077 18,981
Income taxes payable 6,974 2,217
-------- --------
Total current liabilities 80,096 81,746
-------- --------
LONG-TERM DEBT, net 5,765 5,814
OTHER LONG-TERM LIABILITIES 16,742 17,207
DEFERRED INCOME TAXES 7,850 7,850
SHAREHOLDERS' EQUITY 232,896 229,153
-------- --------
$343,349 $341,770
======== ========
</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
March 31,
1996 1995
------------ ------------
<S> <C> <C>
NET SALES $ 121,461 $ 134,360
Cost of Sales 99,737 102,941
------------ ------------
Gross Profit 21,724 31,419
Selling, general and administrative
expenses 4,832 5,121
------------ ------------
INCOME FROM OPERATIONS 16,892 26,298
Other Income (Expense):
Interest expense (481) (598)
Miscellaneous, net (2,714) (369)
------------ ------------
(3,195) (967)
------------ ------------
INCOME BEFORE INCOME TAXES 13,697 25,331
Income Taxes 5,068 9,606
------------ ------------
NET INCOME $ 8,629 $ 15,725
============ ============
EARNINGS PER SHARE $ 0.30 $ 0.53
============ ============
Weighted Average and Equivalent Shares
Outstanding 29,122,000 29,914,000
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 4
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
-------- -------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 22,552 $ 5,127
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of short-term borrowings (4,800) (4,567)
Stock options exercised 206 235
Payments of long-term debt (53) (620)
Cash dividends (1,444) (1,332)
Repurchases of common stock (3,886) (754)
-------- -------
NET CASH USED IN FINANCING ACTIVITIES (9,977) (7,038)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment, net (1,755) (7,844)
Investment in Unconsolidated 50/50 Joint Venture (2,855) --
Proceeds from sales of marketable securities 1,357 7,372
-------- -------
NET CASH USED IN INVESTING ACTIVITIES (3,253) (472)
-------- -------
Net Increase/(Decrease) in Cash and Equivalents 9,322 (2,383)
Cash and Equivalents at Beginning of Period 3,366 5,884
-------- -------
Cash and Equivalents at End of Period $ 12,688 $ 3,501
======== =======
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 5
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Valuation
Adjustment
Common Stock to
---------------------- Additional Cumulative Marketable
Number of Paid-In Translation Securities Retained
Shares Amount Capital Adjustment Portfolio Earnings Total
----------- -------- ---------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1995 29,029,007 $ 14,514 $ 38,911 $(13,828) $(652) $ 190,208 $ 229,153
Net income -- -- -- -- -- 8,628 8,628
Foreign currency
translation, including
related tax benefit -- -- -- 347 -- -- 347
Cash dividends
($.05/share) -- -- -- -- -- (1,444) (1,444)
Repurchases of
common stock (158,100) (78) (3,807) -- -- -- (3,885)
Stock options
exercised, including
related tax
benefit 17,497 8 198 -- -- -- 206
Valuation adjustment to
marketable securities
portfolio -- -- -- -- (109) -- (109)
----------- -------- -------- -------- ----- --------- ---------
Balances at
March 31, 1995 28,888,404 $ 14,444 $ 35,302 $(13,481) $(761) $ 197,392 $ 232,896
=========== ======== ======== ======== ===== ========= =========
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE> 6
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, 1996,
and 1995, and the results of its operations and cash flows for the three
months ended March 31, 1996 and 1995.
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 $186,000 and $257,000 for
the three months ended March 31, 1996, and March 31, 1995, respectively.
Interest amounts capitalized were $0 and $453,000 for the three months
ended March 31, 1996 and March 31, 1995, respectively. Taxes paid were
$496,000 and $1,073,000 for the three months ended March 31, 1996 and March
31, 1995, respectively.
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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, 1996 1995 Over 1995
- ------------------------------------ --------- --------- ----------
<S> <C> <C> <C>
OEM CAST ALUMINUM ROAD WHEELS $112,646 $ 124,543 (9.6)%
AFTERMARKET 8,815 9,817 (10.2)%
--------- ---------
$121,461 $ 134,360 (9.6)%
========= =========
</TABLE>
RESULTS OF OPERATIONS
Net sales were $121.5 million for the quarter ended March 31, 1996, representing
a decrease of 9.6 percent compared to the same quarter in 1995. Lower net sales
resulted from the General Motors strike which curtailed operations at our
Pittsburg, Kansas and Johnson City, Tennessee plants and the unusually harsh
weather in January. The aluminum content of selling prices to OEM customers
reflecting lower prices and costs also reduced sales dollar amounts. For the
quarter, production of vehicles by Ford and GM that utilize the Company's cast
aluminum road wheels decreased by an estimated 18 percent while unit shipments
of the Company's OEM cast aluminum road wheels only decreased approximately 2
percent compared to prior year levels. This would imply that the installation of
aluminum wheels on new cars and light trucks is continuing to increase.
Shipments to our Japanese and European customers are up 40 percent over last
year and now represent 6 percent of our OEM sales.
Net sales in the aftermarket business decreased 10.2 percent for the quarter
ended March 31, 1996, as compared to the same quarter in 1995. Sales in the
aftermarket road wheel product line decreased 15.7 percent while the accessories
line had a small gain of 1.9 percent. This business was impacted by the
previously discussed weather conditions and the overall industry sluggishness.
The introduction of new road wheel products during the first quarter is expected
to result in higher sales orders during the second quarter.
The gross margin was 17.9 percent for the quarter, versus 23.4 percent for the
comparable period in 1995. Reduced gross profit margins reflect the impact of
bad weather and the General Motors strike on plant utilization rates.
For the quarter, selling, general and administrative expenses decreased
$289,000. But as a percentage of net sales they remained relatively flat with
the related quarter in
7
<PAGE> 8
1995, at 4.0 percent compared to 3.8 percent last year. Selling expenses will be
reduced as a result of opening a local full service sales office in Detroit.
Interest expense for the first quarter was down $117,000 or 19.5 percent
compared to the related quarter in 1995 because of continuing prepayments of
long term debt.
Miscellaneous, net increased $2.1 million for the quarter ended March 31, 1996,
over the same period in 1995 principally as a result of $2.9 million of
pre-production costs related to the new Fayetteville chrome plating plant.
Higher pre-production costs reflect continuing technical problems at the chrome
plant. There have been efforts made to reduce costs in the plating plant by
managing labor costs by reductions and staggered shifts to reduce backlogs in
the production process. Miscellaneous, net was additionally impacted by lower
levels of interest income as the Company liquidated short-term investments to
meet daily cash requirements.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $22.6 million for the three months
ended March 31, 1996.
Cash was utilized to fund $1.8 million of capital expenditures primarily for
plant expansion activities relating to the Fayetteville chrome-plating facility.
Additionally, the Company advanced $2.8 million for initial construction and
equipment deposits for its joint venture with German-based Otto Fuchs
Metallwerke, in Tatabanya, Hungary. The joint-venture, which will operate under
the name Suoftec Light Metal Products KFT will produce both light weight forged
and cast aluminum wheels to the European automotive industry. Cash was also used
to reduce outstanding lines of credit and repurchase the Company's common stock,
pursuant to its 1995 stock repurchase program. Approximately 900,000 shares have
been repurchased under the current authorization. An additional million shares
were authorized recently by the Board of Directors.
Working capital and current ratio were $67.4 million and 1.8:1 versus $60.9
million and 1.7:1 at March 31, 1996 and December 31, 1995, respectively.
Long-term debt to total capitalization ratio improved to 2.4 percent at quarter
end versus 2.5 percent at year end. Cash and short term investments as of March
30, 1996 were 19 million. The Company's cash position is sufficient to liquidate
all remaining debt.
8
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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 March 31, 1996
(This space intentionally left blank.)
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<PAGE> 10
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 05/13/96 /s/ LOUIS L. BORICK
________________________________________
Louis L. Borick
President and Chairman of the Board
Date 05/13/96 /s/ JEFFREY ORNSTEIN
________________________________________
R. Jeffrey Ornstein
Vice President and CFO
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND THE
UNAUDITED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS THEN ENDED,
THIS SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH UNAUDITED
CONDENSED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 12,688
<SECURITIES> 6,347
<RECEIVABLES> 72,267
<ALLOWANCES> 1,278
<INVENTORY> 51,186
<CURRENT-ASSETS> 147,487
<PP&E> 313,143
<DEPRECIATION> 138,666
<TOTAL-ASSETS> 343,349
<CURRENT-LIABILITIES> 80,096
<BONDS> 2,911
0
0
<COMMON> 14,444
<OTHER-SE> 218,452
<TOTAL-LIABILITY-AND-EQUITY> 343,349
<SALES> 121,461
<TOTAL-REVENUES> 121,635
<CGS> 99,737
<TOTAL-COSTS> 104,569
<OTHER-EXPENSES> 2,888<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 481
<INCOME-PRETAX> 13,697
<INCOME-TAX> 5,068
<INCOME-CONTINUING> 8,629
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,629
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0
<FN>
<F1>Other expenses include miscellaneous expense.
</FN>
</TABLE>
