Superior's Q2 net income drops 21%; Ark. plant to close
Aluminum wheel supplier Superior Industries International said today that its second-quarter net income tumbled 21 percent from the year-earlier period to $5 million on flat sales of $199 million.
The company blamed higher factory costs relative to slow sales growth for the net income decline. Unit shipments rose 1 percent from the second quarter of 2013, reaching 3 million.
“We continue to experience relative unit volume softness,” CEO Don Stebbins said in a statement. “Our results highlight the need to reduce factory costs to improve margins and also to bolster our longer-term competitive position.”
Superior, facing cost pressures, said Wednesday it would close its plant in Rogers, Ark., by year end, eliminating about 500 jobs. The company said it expects severance costs of $2 million to $2.5 million while generating $15 million in annual labor cost savings.
The supplier said construction of its fourth manufacturing plant in Mexico is proceeding as planned and that the factory is expected to begin operating by year end.
Stebbins said the project is under budget -- the company initially said last year it would spend $125 million to $135 million on the plant.
Meanwhile, Superior is expected to face a proxy fight at its annual shareholder meeting on Aug. 15. GAMCO Asset Management Inc., its largest institutional shareholder, is challenging the current slate of directors and offering three nominees of its own.
In a statement this month, Superior said the opposition is “needless, costly and distracting.”
Superior, of Van Nuys, Calif., ranks No. 69 on the Automotive News list of top 100 suppliers to North America with sales of $790 million to automakers in 2013.
Vince Bond Jr. contributed to this report.
You can reach Kathleen Burke at email@example.com.