Plant closure weighs Superior Industries down in Q3
North America’s largest manufacturer of aluminium car and truck rims, Superior Industries International, slid into the red in the third quarter of the 2014 financial year. The company reports a net loss of US$2.4 million due to quarter expenses of $6.9 million, which were largely associated with the upcoming closure of Superior’s factory in Rogers, Arkansas. Net sales for the third quarter decreased eight per cent to $176.4 million. Third quarter unit shipments fell 11 per cent from the corresponding prior year period to 2.6 million units versus 2.9 million units in 2013.
“The financial impact of our restructuring and other key actions is an investment in our future. We continue to make progress on two of our key initiatives – closure of the Rogers plant and start-up of our new manufacturing facility in Mexico,” said Don Stebbins, who joined Superior in May 2014 as its president, chief executive officer and member of the board of directors.
“The closure of Rogers is on schedule with final production to be completed by mid-December,” added Stebbins. “Production programmes have been successfully shifted to other Superior manufacturing facilities, and we expect the transition to be smooth and seamless for our customers. The closure is anticipated to generate a net savings of approximately $15 million year-over-year. My thanks go out to all of the Rogers employees for their continued dedication during what understandably is a challenging personal transition. I also thank our customers for their cooperation and support in moving production programs to our other facilities.”
Superior reported net income of $7.4 million for the first nine months of 2014, compared with $16.4 million for the corresponding 2013 period. Net sales for the first nine months of 2014 were $558.8 million, versus $597.1 million for the comparable period a year ago, primarily reflecting a six per cent decrease in the number of wheels shipped. Unit shipments for the first nine months of 2014 were 8.4 million versus 9.0 million a year ago. Additionally, the average wheel selling price decreased one per ceent, primarily reflecting a decline in the value of the aluminium component of sales, which is generally passed through to customers. Based on the nine month results and when looking at the fourth quarter, total sales for 2014 are estimated to approximate $740 million.