Wheel maker Superior's Q4 profit plummets; supplier to build plant in Mexico
Aluminum wheel supplier Superior Industries International reported a sharp drop in fourth-quarter net income and said it plans to build a plant in Mexico to help boost its North American business.
The company posted net income of $2.7 million during the final quarter of 2012, down from profits of $40.2 million during the same quarter last year. The 2011 results included a tax gain of $28.2 million.
Total revenue fell to $210 million from $216 million during the same quarter the previous year.
CEO Steven Borick, in a statement today, said the company needs to expand its operations in Mexico with a new plant. The company plans to invest $125 million to $135 million in the operation at a site to be determined. The plant will be able to make 2 million to 2.5 million wheels a year, he said. Superior now produces about 12.5 million wheels a year.
Superior wants to break ground on the project by midyear and complete construction in two years, he said. Project funding is expected to come from existing finances, but the company "is evaluating credit options," he said.
"The opportunities and challenges in our business have clarified the next steps to improve our operating returns," Borick said in a statement. "While our operations in Mexico consistently have performed at class-leading levels, it has been evident we are not currently positioned to participate fully in North American market growth."
Borick said the supplier also plans to improve operations in the United States and Mexico.
For all of 2012, Superior said it posted net income of $30.9 million, down from profits of $67.2 million in 2011. The 2011 results included an overall tax gain of $25.2 million, according to the company's report today. Revenue was essentially flat at $821.4 million last year compared with $822.2 million in 2011.
You can reach Philip Nussel at firstname.lastname@example.org.