Superior Announces Strategic Action in German Production Facility
Superior Announces Strategic Action in German Production Facility to Further Enhance Competitiveness
August 31, 2023 – Superior Industries International, Inc. (“Superior” or the “Company”) (NYSE:SUP) today announced that its subsidiary, Superior Industries Production Germany GmbH (“SPG”), has entered into Protective Shield Proceedings, a court-administered reorganization. These proceedings are strictly limited to SPG and its German-based manufacturing facility, operating at the production site in Werdohl, Germany. The Company’s operations in the U.S., Mexico and Poland are not impacted, and its other German operations and aftermarket business are not part of these proceedings.
“We have made substantial progress in aligning our business to a rapidly evolving operating environment while elevating our footprint to a competitively advantaged position. Today, the vast majority of Superior’s capacity is high-performing and is strategically placed in two low-cost locations, Mexico and Poland, creating an attractive ‘local for local’ solution for our customers as they seek shorter supply chains to mitigate production risks. The action we are taking represents a continuation of our plan and the transformation of the remaining 6% of our footprint,” commented Majdi Abulaban, President and Chief Executive Officer of Superior. “Our competitive differentiators, including our ability to capture customer demand for larger, premium wheels, will continue to support our business well into the future.”
Strategic Action Details
In conjunction with the proceedings, Superior has developed a revised operating plan at its SPG facility to reduce costs, enhance revenues, and to better address critical customer needs. The actions the Company is undertaking are expected to drive long-term improvement in margins and cash flow while enabling a more efficient and effective footprint to support long-term growth. Superior maintains a strong financial position with ample liquidity, enabling the Company to focus on providing the highest level of service for its customers throughout the proceedings.
The Company expects to recognize a non-cash charge of approximately $82 million in the third quarter of 2023, representing the excess of the carrying value of the net assets over the estimated preliminary fair value of its interest in SPG.
2023 Outlook
Superior re-affirmed its full year 2023 outlook, which remains as follows: FY 2023 OutlookUnit Shipments15.0 - 15.8 millionNet Sales$1.55 - $1.63 billionValue-Added Sales$755 - $795 millionAdjusted EBITDA$170 - $190 millionCash Flow from Operations$110 - $130 millionCapital Expenditures~$65 million
Value-Added Sales and Adjusted EBITDA are Non-GAAP measures, as defined below. In reliance on the safe harbor provided under section 10(e) of Regulation S-K, Superior has not quantitatively reconciled from net income, the most comparable GAAP measure, to Adjusted EBITDA presented in the 2023 outlook, as Superior is unable to quantify certain amounts included in net income without unreasonable efforts and due to the inherent uncertainty regarding such variables. Superior also believes that such reconciliation would imply a degree of precision that could potentially be confusing or misleading to investors. However, the magnitude of these amounts may be significant.
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