Superior Industries (SUP) Misses Q2 EPS by 87c, Beats on Revenues; Updates FY Revenue Guidance to Include UNIWHEELS

Superior Industries (NYSE: SUP) reported Q2 EPS of ($0.41), $0.87 worse than the analyst estimate of $0.46. Revenue for the quarter came in at $240.6 million versus the consensus estimate of $190.53 million.

Consolidated Second Quarter 2017 Highlights Including One Month of UNIWHEELS:

Record unit shipments of 3.8 million in Q2 2017

• Q2 2017 net sales of $240.6 million; value-added sales of $130.4 million
• Q2 2017 net loss of $7.3 million and diluted EPS of ($0.41) including acquisition costs of $19.6 million, or $0.78 per diluted share
• Q2 2017 adjusted EBITDA of $29.5 million
• UNIWHEELS tender offer successfully closed
• 2017 outlook updated to reflect inclusion of UNIWHEELS

2017 Outlook

Superior is revising its previously issued outlook for 2017 to include the consolidated results of UNIWHEELS from June through December 2017 as well as to reflect current expectations for Superior’s North American operations. UNIWHEELS’ financials are assumed to be translated at an exchange rate of 1.12 EUR/USD for the second half of 2017.

• Superior now expects net sales to be in the range of $1,095 million to $1,115 million driven by unit shipments of 16.9 million to 17.2 million. This compares to Superior’s previously issued outlook of 12.0 million to 12.25 million units and resulting sales of $730 million to $750 million.
• Superior now expects value-added sales to be in the range of $595 million to $615 million. This compares to Superior’s previously issued outlook of $400 million to $410 million. Value-added sales are defined as net sales less pass-through charges, primarily for the value of aluminum.
• Adjusted EBITDA is now expected to be in the range of $135 million to $145 million compared to the prior outlook of $97 million to $105 million.
• Capital expenditures are expected to be approximately $85 million. This compares to the prior outlook of $50 million.
• Working capital is expected to be a slight source of funds, which compares to the prior outlook of a use of funds.
• The effective tax rate is expected to be in the range of 10% to 13%, which compares to the previous outlook of 25% to 28%.
• Interest expense will be approximately $35 million for the year.

Mr. Stebbins concluded, “We are excited about the opportunities and potential that lie ahead following the addition of UNIWHEELS’ customers, employees and operations. The combined company operates two of the newest manufacturing facilities in the world including our facility in Poland that opened mid-last year, which continues its ramp to full production. The process of integrating the two companies is underway and we look forward to continuing to report on the progress. In addition to the leadership team added through the acquisition, we have also made key changes to the Superior team to support the execution of our vision for the combined organization.”

“Looking at full year 2017, our revised outlook reflects the addition of UNIWHEELS, lighter production in North America, and an operational focus in our plants in North America. We remain acutely focused on adapting to current industry production levels while leveraging the resources of the combined platform to drive improvement and execute on our strategic priorities.”

Value-added sales and adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Financial Information”. In reliance on the safe harbor provided under section 10(e) or Regulation S-K, Superior has not quantitatively reconciled differences between adjusted EBITDA presented in the 2017 outlook to net income, the most comparable GAAP measure, as Superior is unable to quantify certain amounts that would be required to be 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.

GUIDANCE:

Superior Industries sees FY2017 revenue of $1095-1115 million, versus the consensus of $741.82 million.

For earnings history and earnings-related data on Superior Industries (SUP) click here.

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