- Executed temporary and permanent cost reductions benefiting 2020 by ~$40M
- Successful shutdown and restart of all eight manufacturing facilities
- Production schedules indicate strong demand for June and the coming months
- Anticipate available liquidity at the end of Q2 2020 of $210 million to $230 million
- Remain in compliance with all lending covenants
SOUTHFIELD, Mich.--(BUSINESS WIRE)-- Superior Industries International, Inc. (NYSE:SUP), one of the world’s leading aluminum wheel suppliers for OEMs and the European aftermarket, today provided a business update regarding its current operating status.
As of June 1, 2020, Superior had resumed production at all its facilities following the temporary suspension of operations in late March and early April 2020 due to the COVID-19 pandemic. To ensure the well-being of its employees, the Company is executing its Safe Work Playbook across its footprint, which includes expanded cleaning and sanitization, measures to ensure social distancing, distribution of personal protective equipment (PPE) in-line with government requirements, and daily temperature checks, among other activities.
To date, the production restart process has been smooth. The Company’s manufacturing operations have successfully managed through the challenges of an extended shutdown and efficient restart. Also, leading up to and during the restart, Superior worked closely with its supply base, which continues to be supportive and is effectively delivering all material and services required for Superior’s production.
While Superior is experiencing strong demand from its customers in both North America, specifically on pickup/SUV platforms, and in Europe, the Company continues to extend and expand cost reduction initiatives to align costs to the lower production environment. In total, Superior has executed temporary and permanent cost reductions including furloughs, wage reductions, temporary facility closures, elimination of merit increases, reduced travel, personnel restructurings, and use of government subsidies where available. These cost initiatives are expected to benefit 2020 results by approximately $40 million. Further, Superior is currently utilizing, and may utilize again in the future, selective, temporary facility closures to efficiently balance capacity with production costs and inventory levels. In addition to these cost reductions, the Company is taking other measures to improve cash flow through targeted working capital initiatives and by reducing capital expenditures.
“Superior, along with the entire automotive industry, has faced an unprecedented operating environment over the last several months. However, as an organization, our strong performance in the first quarter along with the actions we have taken during the second quarter to enhance our liquidity and financial profile, position us well as we enter the second half of 2020,” commented Majdi Abulaban, President and Chief Executive Officer of Superior. “We continue to focus our efforts on 1) ensuring the health and safety of our employees, 2) sustaining our liquidity position, 3) managing costs to current industry production levels, and 4) utilizing our production capacity efficiently. I remain positive regarding our ability to safely and efficiently adapt our business to meet customer demand as industry production normalizes.”