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Superior Industries International, Inc. (NYSE:SUP) today announced net income of $4.8 million, or $0.18 per diluted share, for the first quarter of 2014. This compares with net income of $4.9 million, or $0.18 per diluted share, for the first quarter of 2013.
Net sales for the 2014 first quarter decreased 11 percent to $183.4 million from $206.4 million in the comparable period a year ago. However, the company’s gross profit improved to $15.6 million for the 2014 first quarter from $13.5 million in 2013, while the 2014 first quarter gross profit margin improved to 8.5% of net sales from 6.5% last year.
The decline in net sales reflects an 8% decrease in unit sales for the 2014 first quarter to 2.8 million wheels and a 4% reduction in the average selling price due to a decline in the aluminum component of sales, which largely is passed through to customers. The increase in gross profit and related margin reflects Superior’s generally lower cost structure, specifically in the areas of labor, maintenance and supplies, due in part to improved efficiencies and benefits derived from capital improvements implemented during the past year.
Selling, general and administrative expenses for the 2014 first quarter increased to $7.9 million, or 4% of net sales, from $7.2 million, or 3% of net sales, last year, primarily attributable to $1.1 million of executive severance costs, offset partially by lower headcount-related costs.
Income from operations increased to $7.7 million from $6.3 million a year ago, largely mirroring the gross profit improvement.
The higher tax provision and effective tax rate of 40% in the first quarter of 2014 reflects the impact of 2014 changes in Mexican tax law, limiting the deductibility of tax-exempt fringe benefit costs, the unavailability of federal R&D tax credits and increases in reserves for uncertain tax positions. The first quarter of 2013 benefited from the inclusion of 2012 and 2013 tax credits recognized as a result of the 2013 enactment of the “American Taxpayer Relief Act of 2012”.