superior industries international 4 th quarter 2008 results earnings conference call february 26,...
TRANSCRIPT
Superior Industries International
4th Quarter 2008 Results
Earnings Conference CallFebruary 26, 2009
Page 2
Forward Looking Statements
Any forward-looking statements made in this web cast are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially because of issues and uncertainties that need to be considered in evaluating our financial outlook. We assume no obligation to update publicly any forward-looking statements. Issues and uncertainties that are of particular significance at this time relate to global competitive pricing, customer financial stability, customer schedule volatility, potential declines in the production of cars and light trucks, and the successful completion of our strategic and operating plans. Please refer to the company’s SEC filings, including our Annual Report on Form 10-K, for a complete write-up on forward-looking statements and risk factors.
Page 3
Actions Taken in Q4 and 2008
Plant Closures – Pittsburg, Kansas facility, announced August 2008– Van Nuys, California facility, announced January 2009– Recorded impairment charge, $12.8M in Q4 and $17.8M in
2008– Severance and related costs, $1.8M in Q4 and $2.7M in 2008
Reduced fixed expenses, savings of ~ $36M annually Transfer of production to our lower cost Mexico
plants; 66% of ongoing Superior production Lowered headcount from plant closures and other
layoffs by 1,569 (32.7%) from the end of 2007 to the end of 2008– Capacity in line with expectations for the next several years,
with room for growth
Page 4
Adjustments in Q4 and 2008
Gas Contracts marked-to-market; $1.6M charge in Q4
Johnson City, TN building impairment $698K Impact of Suoftec-manufactured wheels
$3.8M Pittsburg Q4 manufacturing inefficiencies
~ $2.0M
Page 5
Strengthened Balance Sheet
Redeployment of Fixed Assets with NBV $8.3M (Cost $21.7M)
AR collections stable Managed Inventory to appropriate levels; down
$37M (35%) at year-end 2008 from prior year 2008 current ratio improved to 5.1:1 from
3.7:1 Generated positive cash flow
Cash Balance Increased by $40M During 2008
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Historical SAAR and Superior Shipments
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Au
tos
in M
illio
ns
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
North American Light Vehicle SAAR 1999 - 2008
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Wh
ee
ls in
Mill
ion
s
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Superior Shipments 1999 - 2008
Seasonally Adjusted Annual Rate (SAAR)
expected to fall to 10.5 million in 2009 (average
analyst prediction)
Page 7
4th Quarter Overview(US$ in 000s)
2008 2007 Amount PercentUnit Shipments (000s) 2,206 3,213 (1,007) -31.3%
Total Revenues 151,917$ 229,243$ (77,326)$ -33.7%
Gross Profit (Loss) (3,671)$ 11,493$ (15,164)$ % of Revenues -2.4% 5.0% -7.4%
SG&A Expenses 6,447 5,442 1,005 18.5% % of Revenues 4.2% 2.4% 1.9%
Impairment Costs 13,457 - (13,457)
Operating Income (Loss) (23,575) 6,051 (29,626) % of Revenues -15.5% 2.6% -18.2%
Interest Income, net 582 976 (394) -40.4%Other Income, net 83 769 (686) -89.2%Foreign Exchange Gain (Loss) 5,986 (43) 6,029
Income (Loss) Before Equity Earnings (16,924)$ 7,753$ (24,677)$
Income Tax (Provision) (1,375) (5,624) 4,249 -75.6%Equity Earnings (Loss) (1,820) 2,619 (4,439) -169.5%
Net Income (Loss) (20,119)$ 4,748$ (24,867)$
EPS (0.75)$ 0.18$ (0.93)$
Increase (Decrease)4th Quarter
Unaudited
Page 8
Q4 2008 One-Time Net Expenses
Q4
Loss Before Tax & Equity Earnings Loss (16,924)$
Add back: Impairments: Van Nuys 10,342$ Pittsburg 2,417 Johnson City 698 13,457
Gas Contracts: Van Nuys 814$ Pittsburg 818 1,632
Pittsburg Inefficiencies 2,000
Severance Costs 1,783
Impact of Suoftec Wheels 3,828
Deduct: Peso F/X Gain (5,920)
Total Special Adjustments 16,780
Pretax Loss Before One-Time Items (144)$
(US$ in 000s)
Unaudited
Page 9
Fiscal Year 2008 vs. 2007 Overview
2008 2007 Amount PercentUnit Shipments (000s) 10,358 13,205 (2,848) -21.6%
Total Revenues 754,894$ 956,892$ (201,998)$ -21.1%
Gross Profit 6,577$ 32,492$ (25,915)$ -79.8% % of Revenues 0.9% 3.4% -2.5%
SG&A Expenses 25,744 29,171 (3,427) -11.7% % of Revenues 3.4% 3.0% 0.4%
Impairment Costs 18,501 - (18,501)
Operating Income (Loss) (37,668) 3,321 (40,989) % of Revenues -5.0% 0.3% -5.3%
Interest Income, net 2,917 3,684 (767) -20.8%Other Income, net 697 2,661 (1,964) -73.8%Foreign Exchange Gain 5,481 534 4,947
Income (Loss) Before Equity Earnings (28,573)$ 10,200$ (38,773)$
Income Tax Benefit (Provision) 1,778 (6,263) 8,041 -128.4%Equity Earnings 742 5,355 (4,613) -86.1%
Net Income (Loss) (26,053)$ 9,292$ (35,345)$
EPS (0.98)$ 0.35$ (1.33)$
Fiscal Year Increase (Decrease)(US$ in 000s)
Unaudited
Page 10
2008 One-Time Net Expenses
2008
Loss Before Tax & Equity Earnings Loss (28,573)$
Add back: Impairments: Van Nuys 10,342$ Pittsburg 7,461 Johnson City 698 18,501
Gas Contracts: Van Nuys 814$ Pittsburg 818 1,632
Pittsburg Inefficiencies 2,000
Severance Costs 2,728
Impact of Suoftec Wheels 3,828
Deduct: Peso F/X Gain (5,415)
Total Special Adjustments 23,274
Pretax Loss Before One-Time Items (5,299)$
(US$ in 000s)
Unaudited
Page 11
Summary Balance SheetsUnaudited
(US$ millions) BALANCE SHEETS12/08 12/07 Incr/(Decr)
ASSETSCash & Short-term Investments 146.9$ 106.8$ 40.1$ Accounts Receivable, Net 89.4 125.7 (36.3) Inventories, Net 70.1 107.2 (37.1) Other Current Assets 12.9 16.4 (3.5)
Total Current Assets 319.3$ 356.1$ (36.8)$
Property, Plant & Equipment, Net 216.2 302.2 (86.0) Other Assets 93.0 71.6 21.4
Total Assets 628.5$ 729.9$ (101.4)$
LIABILITIES & EQUITYAccounts Payable 26.3$ 51.6$ (25.3)$ Other Current Liabilities 35.9 44.0 (8.1)
Total Current Liabilities 62.2$ 95.6$ (33.4)$
Non-Current Liabilities 94.7 83.7 11.0 Shareholders Equity 471.6 550.6 (79.0)
Total Liabilities 628.5$ 729.9$ (101.4)$
Page 12
Summary Cash Flow Statements
Unaudited
(US$ millions) CASH FLOWS2008 2007 Incr/(Decr)
NET INCOME (LOSS) (26.1)$ 9.3$ (35.4)$
Depreciation 43.7 42.9 0.8 Impairments 18.5 - 18.5 Working Capital/Other 31.8 22.6 9.2
Cash from Operations 67.9$ 74.8$ (6.9)$
Capital Expenditures (13.2) (37.6) 24.4 Cash Dividends (17.1) (17.0) (0.1) Proceeds from Sale of Investments - 14.9 (14.9) All Other 2.5 3.3 (0.8)
Net Increase in Cash 40.1$ 38.4$ 1.7$
Cash and Cash Equivalents, Beginning 106.8 68.4 38.4
Cash and Cash Equivalents, Ending 146.9$ 106.8$ 40.1$
Page 13
Conclusion
Results reflect structural changes made in 2008– Two plant closures– 32.7% overall headcount reduction in the year
Streamlined and lean going forward Balance sheet is healthy
– Cash balance increased $40M – Inventory levels are reasonable– Prudent management of fixed assets
Capacity and infrastructure have been right-sized
Well positioned for the next several years