Wheel maker turns a profit

Tax gain spurs Superior’s 3rd

Friday, November 2, 2012

Superior Industries International posted a profit last quarter, but the company’s leader is not happy where most of it came from.

A $5.2 million tax benefit pushed Superior’s net income to $15.1 million for the third quarter of 2012 that ended Sept. 28.

“I wish all those were earnings I could report,” Steven J. Borick, chairman, chief executive officer and president, said during the company’s earnings call. “We did make money again in the quarter, but I’m not happy.”

The tax benefit resulted from a settlement reversal from a 2004 Mexican income tax audit, company officials announced Thursday.

The Van Nuys, Calif.-based automotive aluminum wheel maker has three factories in Mexico. Its only U.S. operations are in Fayetteville and Rogers.

Superior employs 1,450 in Fayetteville and 560 in Rogers. The factories make wheels primarily for Chrysler, Ford, Toyota and General Motors.

Borick pointed to ongoing challenges in U.S. operations that continue to hit the company’s bottom line, but said he feels posi-tive about the direction they are headed.

Kerry Shiba, Superior’s executive vice president and chief financial officer, said problems at the U.S. factories include aging facilities and equipment reliability.

The company plans to spend up to $30 million on capital improvements this year, with about 60 percent going to the local plants.

Repairs and maintenance totaled $1.1 million companywide for the third quarter.

Net sales dropped 6 percent to $193.9 million compared with the third quarter of 2011.

“This masks a 2 percent increase in volume,” Shiba said.

Superior shipped 2.95 million units for the quarter compared with 2.9 million in the same time period last year.

The 2 percent increase came after a 15 percent increase from last year in total light vehicle production. Wards Automotive Group reported vehicle production rose to 3.66 million units from 3.18 million year-over-year.

Shiba said North America auto production posted the strongest third quarter since 2005.

“Our largest customers,Ford and General Motors, grew much slower than the industry overall,” Shiba said.

Ford’s passenger car manufacturing dropped 9 percent while light trucks grew by 9 percent. GM grew 3 percent in passenger cars and was slightly down in light trucks.

A decline in aluminum prices that were passed on to customers also hit Superior’s bottom line. The average unit selling price decreased 8 percent in the quarter compared with a year ago.

Superior shares closed at $17.42 Thursday, up 33 cents or 1.93 percent from Wednesday. Stocks traded between $14.58 and 20.27 during the past 52 weeks.

Business, Pages 21 on 11/02/2012