Superior Industries’ Q2 net income 56% lower
Wheel manufacturer Superior Industries International has reported a net income of US$6.4 million for the second quarter of 2012. This result for the three months to 30 June represents a 56.4 per cent year-on-year drop in net income despite a three per cent increase in consolidated net sales to US215.1 million. Unit shipments increased 14 per cent to 3.3 million from 2.9 million in last year’s second quarter, while gross profit was $15.7 million, or seven per cent of net sales, compared with $19.5 million, or nine per cent of net sales, in the comparable period a year ago.
According to the company, the average unit selling price decreased ten per cent in the second quarter of 2012, a drop largely attributable to a decline in average aluminium price, along with a weaker product mix and a decline in the value of the Mexican peso relative to the US dollar. Reduced gross profit and margin percentage reflected the weaker product mix, along with manufacturing challenges in the US and the negative impact from foreign currency rates. All Superior Industries International manufacturing facilities operated at or near full capacity during the quarter, however higher operating costs in the US offset a strong performance at the company’s facilities in Mexico.
“I am pleased that our factories, especially our plants in Mexico, met a significant increase in demand for our product despite already operating at very high utilisation rates,” said Steven J. Borick, chairman, CEO and president of Superior Industries International. “However, when considering the ever-increasing product standards that we must meet in the context of today’s pricing, we still are incurring significant operating and profitability challenges in our US manufacturing facilities. We continue to invest in capital equipment and talent to address these challenges and remain confident we can improve the performance of our US plants that today remain critical to meeting the needs of our customers.”
First half results
Consolidated net sales for the first half of 2012 increased five per cent to $417.5 million, from $398.3 million for the comparable period a year ago. Unit shipments for the first six months of 2012 increased 13 per cent. The average selling price of wheels during the first half of 2012 decreased approximately seven per cent, primarily due to a decrease in the pass-through price of aluminium, as well as a weaker product mix and Mexican peso.
Consolidated gross profit for the first half of 2012 decreased to $32.8 million, or eight per cent of net sales, compared with $36.4 million, or nine per cent of net sales, for the comparable period a year ago. The decrease resulted from higher volume and continued plant operation at full capacity, as well as an unfavourable change in product mix. Certain factory costs, including repairs, maintenance, supplies, labour and fringe benefit costs were higher in first half of 2012 than in the prior year. Consolidated income from operations was $18.4 million, or four per cent of net sales for the first half of 2012, versus $23.0 million, or six per cent of net sales, in 2011.