Superior Industries International, Inc. today announced financial results for the Q1 of 2007.
Unit wheel shipments of Superior Industries International, Inc. increased 16.1%. "We are encouraged by this substantial rebound in shipments resulting from new program awards from our customers. We remain increasingly confident that our multi-year restructuring program is positioning Superior to achieve our long-term goals for growth and profitability," said President and CEO Steven Borick.
Net sales increased to $244,875,000 compared to $183,525,000 for the Q1 of 2006, reflecting the increase in volume, higher pass-through aluminum costs in selling prices and a shift toward larger wheel sizes. Consolidated net income from continuing operations for the Q1 of 2007 was $1,854,000, or $0.07 per diluted share. This compares to net income from continuing operations for the Q1 of 2006 of $1,436,000, or $0.05 per diluted share. In last year's Q1, Superior reported a net loss from the company's discontinued suspension components business of $326,000, or $0.01 per diluted share.
Net income for the Q1 of 2006 was $1,110,000, or $0.04 per diluted share. Gross margin declined compared to the prior year, primarily the result of inefficiencies associated with the start-up of production and initial shipments at Superior's new plant in Chihuahua, Mexico, costs associated with the previously announced closure in 2007 of the Company's Johnson City, Tennessee facility and continuing production challenges at Superior’s Midwest plants.
"We expect margins at our new Chihuahua facility, the most advanced large-diameter wheel casting plant in the world, to steadily improve as volume ramps up during the year, and the one time issues related to Johnson City to steadily decline in significance. We are addressing the Midwest production challenges and have begun to see improvement," Borick said. SG&A expenses for the Q1 of 2007 increased to $6,915,000, which included non-cash stock-based compensation expense and substantial increases in professional fees related to increased legal and audit matters.
This compares to SG&A expenses of $5,395,000 for the Q1 of 2006. Other income in the Q1 of 2007 includes a $2.4 million gain on the sale of an available-for-sale security. Superior's share of profits from its joint venture aluminum wheel manufacturing operation in Hungary was $791,000 for the Q1 of 2007 compared to $476,000 a year earlier. The tax benefit on the loss from continuing operations in the Q1 of 2007 reflects an estimated effective tax rate of 39.6%, or $624,000, plus a reduction in required tax reserves totaling $1,986,000.
The tax reserve adjustments were due primarily to the addition of reserves for current period activity net of the release of reserves related to the expiration of a statute of limitations. The tax benefit in the Q1 of 2006 included a tax provision of approximately $295,000, which was offset by a net reduction of tax reserves totaling $913,000, due to the expiration of a tax statute of limitations.