<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, 1997
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 9, 1997
--------------------- -------------------------------
<S> <C>
$.50 PAR VALUE 28,132,214
</TABLE>
1
<PAGE> 2
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
1997 1996
-------------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 40,099 $ 36,815
Short-term investments, at the lower of
cost or market 5,267 5,288
Receivables, net 66,017 66,567
Inventories
Raw materials 17,301 16,606
Work in process 14,508 14,256
Finished goods 20,705 16,868
-------------- -----------
52,514 47,730
Other current assets 7,677 7,680
-------------- -----------
Total current assets 171,574 164,080
-------------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 159,487 161,670
OTHER ASSETS 32,812 31,840
-------------- -----------
$ 363,873 $ 357,590
============== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion
of long-term debt $ 3,874 $ 3,874
Accounts payable 38,150 46,178
Accrued liabilities 33,144 26,317
-------------- -----------
Total current liabilities 75,168 76,369
-------------- -----------
LONG-TERM DEBT, net 1,883 1,940
OTHER LONG-TERM LIABILITIES 18,309 17,850
DEFERRED INCOME TAXES 10,220 10,320
SHAREHOLDERS' EQUITY 258,293 251,111
-------------- -----------
$ 363,873 $ 357,590
============== ===========
</TABLE>
See notes to consolidated condensed financial statements.
2
<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,
1997 1996
------------ ------------
<S> <C> <C>
NET SALES $ 125,893 $ 121,461
Cost of Sales 103,496 99,737
------------ ------------
Gross Profit 22,397 21,724
Selling, general and administrative
expenses 4,774 4,832
------------ ------------
INCOME FROM OPERATIONS 17,623 16,892
Other Income (Expense):
Interest expense (143) (481)
Interest income 581 174
Miscellaneous, net 54 (2,888)
------------ ------------
492 (3,195)
------------ ------------
INCOME BEFORE INCOME TAXES 18,115 13,697
Income Taxes 6,567 5,068
------------ ------------
Net Income $ 11,548 $ 8,629
============ ============
Earnings Per Share $ 0.41 $ 0.30
============ ============
Weighted Average and Equivalent Shares
Outstanding 28,267,000 29,122,000
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE> 4
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
----------- -----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 12,887 $ 22,552
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings - (4,800)
Stock options exercised 388 206
Payments of long-term debt (57) (53)
Cash dividends (1,698) (1,444)
Repurchases of common stock (3,033) (3,886)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (4,400) (9,977)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment, net (4,453) (1,755)
Proceeds from sales of marketable securities - (2,855)
Investment in Hungarian joint venture (750) 1,357
Purchases of marketable securities - -
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (5,203) (3,253)
----------- -----------
Net Increase in Cash and Equivalents 3,284 9,322
Cash and Equivalents at Beginning of Period 36,815 3,366
----------- -----------
Cash and Equivalents at End of Period $ 40,099 $ 12,688
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
4
<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
Common Stock Adjustment
----------------------- Additional Cumulative to
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, 1996 28,323,666 $ 14,161 $ 20,845 $ (13,845) $ (554) $ 230,504 $ 251,111
Net income - - - - - 11,548 11,548
Foreign currency
translation, net of
related deferred
income taxes - - - (9) - - (9)
Cash dividends
($.06/share) - - - - - (1,691) (1,691)
Repurchases of
common stock (129,500) (65) (2,968) - - - (3,033)
Stock options
exercised, including
related tax
benefit 34,848 18 371 - - - 389
Valuation adjustment to
marketable securities - - - - (22) - (22)
----------- ---------- ------------ ------------ ------------ ---------- ----------
Balances at
March 30, 1997 28,229,014 $ 14,114 $ 18,248 $ (13,854) $ (576) $ 240,361 $ 258,293
=========== ========== ============ ============ ============ ========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
5
<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 adjustments necessary, which
are of a normal and recurring nature, to present fairly the financial
position of the Company as of March 31, 1997, and the results of its
operations and cash flows for the three month periods ended March 31, 1997
and 1996.
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. Interim financial reporting standards require management to make estimates
that are based on assumptions regarding the outcome of future events and
circumstances not known at the present time. Inevitably, some assumptions
may not materialize and unanticipated events and circumstances may occur
which vary from those estimates and such variations may significantly
affect the Company's future results.
4. No interest was paid for the first quarter of 1997, and $186,000 was paid
for the first quarter of 1996. No interest was capitalized for either of
these three month periods. Taxes paid were $481,000 and $496,000 for the
three months ended March 31, 1997 and 1996, respectively.
5. Some statements included in this filing which are not historical in nature
are forward looking statements within the meaning of the Private Securities
Legislation Act of 1995. Forward looking statements regarding the Company's
future performance and financial results are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those set forth in the forward looking statements due to a variety of
factors. Factors that may impact such forward looking statements include,
among others, changes in the condition of the industry, changes in general
economic conditions and the success of the Company's strategic and
operating plans.
6
<PAGE> 7
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, 1997 1996 Over 1996
- ------------------------------------ -------- -------- ----------
<S> <C> <C> <C>
OEM CAST ALUMINUM ROAD WHEELS.............. $117,630 $112,646 4.4 %
AFTERMARKET................................ 8,263 8,815 (6.3)%
-------- --------
$125,893 $121,461 3.6 %
======== ========
</TABLE>
RESULTS OF OPERATIONS
Net sales were $125.9 million for the quarter ended March 31, 1997,
representing an increase of 3.6 percent compared to the same quarter in 1996.
Higher net sales resulted from increased installation of aluminum wheels
despite automobile manufacturing plant closures during the quarter and slow
ramp up of certain new models. Unit shipments of the Company's OEM cast
aluminum road wheels increased 6.3 percent compared to prior year levels while
production of vehicles by Ford and GM that utilize the Company's cast aluminum
road wheels were flat compared to the same quarter last year. Also, shipments
to our Japanese and European customers rose 55 percent to a record 9 percent of
total company shipments. The sales increase for the 1997 period was also
favorably affected by consolidating the Company's chrome-plating business with
the operating results of its OEM aluminum plants. For the 1996 quarter, the
results of this start up business were combined for one line presentation in
Miscellaneous Expense, Net. These increases were partially offset by the lower
cost of aluminum content included in the Company's selling prices to OEM
customers.
Net sales in the aftermarket business decreased 6.3 percent for the quarter
ended March 31, 1997, as compared to the same quarter in 1996. This business
continues to be impacted by general sluggishness in the overall aftermarket
segment of the automotive industry.
The gross margin was 17.8 percent for the quarter, versus 17.9 percent for the
comparable period in 1996. Despite the growth in sales, the gross margin
percent remained consistent with the prior year because of the consolidation of
the lower margin chrome-plating business and reduced selling prices.
For the quarter, selling, general and administrative expenses are consistent
with 1996 in both dollars and as a percentage of net sales.
7
<PAGE> 8
Interest income increased $407,000 or 233.9 percent due to a stronger cash
position. Interest expense for the first quarter was down $338,000 or 70.2
percent compared to the related quarter in 1996 because of a lower long term
debt level.
Miscellaneous, net reflects income of $54,000 compared to a loss of $2.9
million for the quarter ended March 31, 1996. The prior year loss was
associated with the start up of the Fayetteville chrome-plating plant.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $12.9 million for the three
months ended March 31, 1997.
Cash was utilized to fund $4.8 million of capital expenditures and to
repurchase 129,500 shares of the Company's common stock, pursuant to its 1995
stock repurchase program. Approximately 1.7 million shares have been
repurchased under the current 2.0 million authorization.
Working capital and current ratio were $96.4 million and 2.3:1 versus $87.7
million and 2.1:1 at March 31, 1997 and December 31, 1996, respectively.
Long-term debt to total capitalization ratio improved to .7 percent at quarter
end versus .8 percent at year end. Cash and short term investments as of March
31, 1997 were $45.4 million. The Company's cash position is substantially in
excess of all remaining debt amounts.
8
<PAGE> 9
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, 1997.
(This space intentionally left blank.)
9
<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 5/14/97 /s/ Louis L. Borick
------- ------------------------------------
Louis L. Borick
President and Chairman of the Board
Date 05/14/97 /s/ R. Jeffrey Ornstein
-------- ------------------------------------
R. Jeffrey Ornstein
Vice President and CFO
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED, CONSOLIDATED CONDENSED BALANCE SHEETS AS OF MARCH 31, 1997 AND THE
UNAUDITED, CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
THEN ENDED. THIS SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
UNAUDITED, CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 40,099
<SECURITIES> 5,267
<RECEIVABLES> 67,422
<ALLOWANCES> 1,405
<INVENTORY> 52,514
<CURRENT-ASSETS> 171,574
<PP&E> 325,721
<DEPRECIATION> 166,234
<TOTAL-ASSETS> 363,873
<CURRENT-LIABILITIES> 75,168
<BONDS> 1,883
0
0
<COMMON> 14,114
<OTHER-SE> 244,179
<TOTAL-LIABILITY-AND-EQUITY> 363,873
<SALES> 125,893
<TOTAL-REVENUES> 126,474
<CGS> 103,496
<TOTAL-COSTS> 108,270
<OTHER-EXPENSES> (54)<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143
<INCOME-PRETAX> 18,115
<INCOME-TAX> 6,567
<INCOME-CONTINUING> 11,548
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,548
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0
<FN>
<F1> OTHER EXPENSES INCLUDE MISCELLANEOUS EXPENSE.
</FN>
</TABLE>
