On November 7, 2024, Superior Industries International Inc (SUP, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. The company, a leading designer and manufacturer of aluminum wheels for OEMs and the European aftermarket, reported net sales of $322 million, slightly below the analyst estimate of $337.32 million. However, the reported net loss per share of $1.24 was worse than the expected loss of $0.15 per share.
Performance and Challenges
Superior Industries International Inc (SUP, Financial) faced a challenging production environment in Q3 2024, yet managed to achieve margin expansion and growth in Adjusted EBITDA. The company reported a net loss of $25 million, a significant improvement from the $86 million loss in the same period last year. This improvement is attributed to lower conversion costs and the absence of a substantial charge related to the deconsolidation of a German subsidiary that impacted the previous year's results.
The company's performance is crucial as it navigates a competitive automotive industry, where maintaining profitability amidst fluctuating production volumes and costs is vital. The challenges faced, including increased SG&A expenses due to refinancing and restructuring, highlight the need for strategic cost management.
Financial Achievements
Superior Industries International Inc (SUP, Financial) successfully completed a debt refinancing, securing $520 million in new capital. This strategic move strengthens the company's balance sheet and enhances its competitive positioning. The refinancing is particularly important in the vehicles and parts industry, where financial flexibility can support innovation and adaptation to market changes.
Key Financial Metrics
In Q3 2024, Superior Industries reported a gross profit of $29 million, up from $25 million in the prior year, driven by lower conversion costs. SG&A expenses increased to $24 million, primarily due to professional service fees related to refinancing. The company recognized a $13 million loss on extinguishment of debt, reflecting the costs associated with the refinancing process.
Adjusted EBITDA was $41 million, representing 24% of Value-Added Sales, an improvement from 22% in the previous year. This metric is crucial as it indicates the company's operational efficiency and ability to generate earnings before interest, taxes, depreciation, and amortization.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $322M | $323M |
| Net Loss | $25M | $86M |
| Adjusted EBITDA | $41M | $39M |
Analysis and Outlook
Superior Industries International Inc (SUP, Financial) is adjusting its full-year outlook due to softer-than-expected production among key customers. The company anticipates net sales between $1.25 billion and $1.33 billion for the full year, a reduction from previous estimates. Despite these challenges, the company remains focused on aligning costs with the current production environment and leveraging its differentiated portfolio to generate long-term value.
“Our teams executed in a challenging production environment to deliver margin expansion and Adjusted EBITDA growth this quarter. In addition, we successfully completed our debt refinancing, attracting $520 million in new capital. This refinancing significantly strengthens our balance sheet and competitive positioning, enabling us to focus on optimizing our business to drive profitable growth,” commented Majdi Abulaban, President and Chief Executive Officer of Superior.
Superior Industries International Inc (SUP, Financial) continues to navigate a complex market landscape, balancing strategic investments with cost management to maintain its competitive edge in the automotive industry.
Explore the complete 8-K earnings release (here) from Superior Industries International Inc for further details.
