The following is a summary of the Superior Industries International, Inc. (SUP) Q1 2024 Earnings Call Transcript:
Financial Performance:
Superior's Q1 2024 net sales decreased to $316 million, with value-added sales decreasing to $172 million.
Adjusted EBITDA was $31 million and net loss was $33 million.
Unlevered free cash flow for Q1 2024 was $8 million, decline of $26 million year-on-year due to lower cash from operating activities offset partly by reduced capital expenditure.
The company's net debt of $439 million remains near historical low.
Superior maintained ample liquidity and is gaining traction with refinancing and capital structure solutions.
A year-over-year benefit of $23 million to $25 million is expected annually due to the change of wheels production from Germany to Poland.
For 2024, Superior expects net sales in the range of $1.38 billion to 1.48 billion, value-added sales between $720 million and $770 million, and adjusted EBITDA of $155 million to 175 million.
Business Progress:
Superior exited high-cost German operations successfully in Q1, relocating production to low-cost Poland, enhancing profitability, and rendering the company a 100% low-cost manufacturer.
Despite industry challenges such as declining production volumes, the company is well-positioned for a significant margin improvement in 2024.
Superior anticipates further growth as the average age of US car parks is at historical lows.
The increasing adoption of lightweight and premium versions of wheels is driving future content growth.
Superior maintains a strong competitive stance as the leader in Europe and North America with the diversified customer base in the wheel space and maintains a 100% low-cost and local footprint.
The financial data for the quarter did not include wheels produced in Germany. The $20 million to $35 million costs for asset transfer will impact cash flows but will not be reflected in adjusted EBITDA.
Superior is steering its focus on sales and value-added sales. The company is toward the end of execution for cash costs regarding the asset transfer and is progressing with the ongoing refinancing process.
More details: Superior Industries International IR
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