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Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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Page 1: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

Superior Industries International

4th Quarter 2008 Results

Earnings Conference CallFebruary 26, 2009

Page 2: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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

Page 6: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

Page 6

Historical SAAR and Superior Shipments

8

9

10

11

12

13

14

15

16

17

18

Au

tos

in M

illio

ns

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

North American Light Vehicle SAAR 1999 - 2008

5

6

7

8

9

10

11

12

13

14

15

16

17

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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: Superior Industries International 4 th Quarter 2008 Results Earnings Conference Call February 26, 2009

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