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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 28, 2006
 
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
         
California   1-6615   95-2594729
(State or Other Jurisdiction   (Commission File Number)   (IRS Employer
of Incorporation)       Identification No.)
     
7800 Woodley Avenue    
Van Nuys, California   91406
(Address of Principal Executive Offices)   (Zip Code)
Registrant’s Telephone Number, Including Area Code: (818) 781-4973
N/A
(Former Name or Former Address, if Changed Since Last Report)
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

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Item 2.01 Completion of Acquisition or Disposition of Assets
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT 99.1

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Item 2.01 Completion of Acquisition or Disposition of Assets
Superior Industries International, Inc. (“Superior”), as seller, entered into an Asset Purchase Agreement (“Agreement”) with Saint Jean Industries, Inc., a Delaware corporation, as buyer, and the buyer’s parent, Saint Jean Industries, SAS, a French simplified joint stock company, for substantially all of the assets and working capital of Superior’s suspension components business located in Heber Springs, Arkansas (“Suspension Components Business”), and associated real estate. Subject to post closing adjustments and indemnification obligations, the $17.0 million purchase of the suspension components business by Saint Jean Industries, Inc., including a $2.0 million promissory note, was funded and completed on September 28, 2006 with title, risk and rewards transferring as of September 24, 2006. $5.0 million of the purchase price is to be paid after the completion date pending finalization of financing of that portion of the purchase price. Superior is retaining an equal amount of accounts receivable of the business until such amount is paid. All financial and pro forma information herein assumes full and timely payment of such amount. The $2.0 million promissory note is due in two equal installments on the 24th and 36th month anniversary date of the completion date, and bears interest at LIBOR plus 1%, adjusted quarterly. In addition, the buyer will assume selected liabilities of the business. During 2006, the assets and liabilities being sold have been designated as “held for sale” and the operating results have been reflected as discontinued operations in the first and second Quarterly Reports on Form 10-Q.
This Form 8-K supersedes and corrects the September 22, 2006 press release by Superior attached here to as Exhibit 99.1 solely with respect to the completion date stated in such press release.
This Form 8-K contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the company’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors and risks discussed from time to time in the company’s Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial Information
The accompanying unaudited pro forma consolidated financial information of Superior Industries International, Inc. reflects the sale of substantially all of the assets of the suspension components business in accordance with the terms of the sale agreement and has been prepared pursuant to rules and regulations of the United States Securities and Exchange Commission. The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and, therefore, are not necessarily indicative of the operating results and financial position that might have been achieved had the sale occurred as of an earlier date, nor are they necessarily indicative of operating results and financial position that may occur in the future. The unaudited pro forma consolidated financial statements do not reflect the use of the estimated net cash proceeds in our ongoing operations or the effect on our future financial position. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements and notes thereto in the Annual Report on Form 10-K for the year ended December 25, 2005.
The following Pro Forma Consolidated Statement of Operations presentation gives effect to the sale of the suspension components business as if it had occurred on the first day of fiscal years 2005, 2004 and 2003. The column titled “Elimination of Suspension Components Business” on the following statements of operation represents the direct revenues and costs associated with the suspension components business. The following Pro Forma Consolidated Balance Sheet presentation gives effect to the sale of the suspension components business as if it had occurred June 25, 2006.

 

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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 25, 2005
(Dollars in thousands, except per share amounts)
                         
            Elimination of        
            Suspension        
            Components        
    Superior     Business     Pro Forma  
NET SALES
   $ 844,884     $ 40,723     $ 804,161  
Cost of sales
     808,649       53,602       755,047  
 
                  
 
                        
GROSS PROFIT (LOSS)
     36,235       (12,879 )     49,114  
 
                        
Selling, general and administrative expenses
     21,019       34       20,985  
Impairment of long-lived assets
     41,895       34,040       7,855  
 
                  
 
                        
INCOME (LOSS) FROM OPERATIONS
     (26,679 )     (46,953 )     20,274  
 
                        
Equity earnings of joint ventures
     5,206       —       5,206  
Interest income, net
     5,329       —       5,329  
Other income (expense), net
     (588 )     290       (878 )
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES
     (16,732 )     (46,663 )     29,931  
 
                        
Income tax provision (benefit) (a)
     (9,671 )     (17,497 )     7,826  
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS
   $ (7,061 )   $ (29,166 )   $ 22,105  
 
                  
 
                        
EARNINGS (LOSS) PER SHARE
                        
Basic
   $ (0.27 )   $ (1.10 )   $ 0.83  
Diluted
   $ (0.27 )   $ (1.10 )   $ 0.83  
 
                        
Weighted average shares outstanding:
                        
Basic
     26,614               26,614  
Diluted (b)
     26,614               26,620  
 
(a)   The effective tax rate before discrete items for the suspension components business is 37.5% which is comprised of 30.1% on operations and 40.2% on impairment of long-lived assets.
     
(b)   Approximately 6,000 shares of common stock equivalent units were excluded from diluted earnings (loss) per share calculation because they would have been anti-dilutive due to the net loss for the period.

 

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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 26, 2004
(Dollars in thousands, except per share amounts)
                         
            Elimination of        
            Suspension        
            Components        
    Superior     Business     Pro Forma  
NET SALES
   $ 901,755     $ 29,497     $ 872,258  
Cost of sales
     819,639       39,887       779,752  
 
                  
 
                        
GROSS PROFIT (LOSS)
     82,116       (10,390 )     92,506  
 
                        
Selling, general and administrative expenses (a)
     25,776       2,932       22,844  
Impairment of long-lived assets
     —       —       —  
 
                  
 
                        
INCOME (LOSS) FROM OPERATIONS
     56,340       (13,322 )     69,662  
 
                        
Equity earnings of joint ventures
     8,611       —       8,611  
Interest income, net
     2,772       —       2,772  
Other income (expense), net
     (1,614 )     —       (1,614 )
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES
     66,109       (13,322 )     79,431  
 
                        
Income tax provision (benefit)
     21,454       (4,323 )     25,777  
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS
   $ 44,655     $ (8,999 )   $ 53,654  
 
                  
 
                        
EARNINGS (LOSS) PER SHARE
                        
Basic
   $ 1.68     $ (0.34 )   $ 2.01  
Diluted
   $ 1.67     $ (0.34 )   $ 2.00  
 
                        
Weighted average shares outstanding:
                        
Basic
     26,655               26,655  
Diluted
     26,809               26,809  
 
(a)   Elimination of Suspension Components Business includes $2,904 provision for doubtful accounts for Tower Automotive, Inc., a suspension components customer, that filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

 

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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 28, 2003
(Dollars in thousands, except per share amounts)
                         
            Elimination of        
            Suspension        
            Components        
    Superior     Business     Pro Forma  
NET SALES
   $ 840,349     $ 14,409     $ 825,940  
Cost of sales
     716,558       25,027       691,531  
 
                  
 
                        
GROSS PROFIT (LOSS)
     123,791       (10,618 )     134,409  
 
                        
Selling, general and administrative expenses
     22,902       —       22,902  
Impairment of long-lived assets
     —       —       —  
 
                  
 
                        
INCOME (LOSS) FROM OPERATIONS
     100,889       (10,618 )     111,507  
 
                        
Equity earnings of joint ventures
     8,655       —       8,655  
Interest income, net
     2,727       —       2,727  
Other income, net
     1,144       —       1,144  
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES
     113,415       (10,618 )     124,033  
 
                        
Income tax provision (benefit)
     39,695       (3,716 )     43,411  
 
                  
 
                        
INCOME (LOSS) FROM CONTINUING OPERATIONS
   $ 73,720     $ (6,902 )   $ 80,622  
 
                  
 
                        
EARNINGS (LOSS) PER SHARE
                        
Basic
   $ 2.76     $ (0.26 )   $ 3.02  
Diluted
   $ 2.73     $ (0.26 )   $ 2.98  
 
                        
Weighted average shares outstanding:
                        
Basic
     26,673               26,673  
Diluted
     27,033               27,033  

 

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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 25, 2006
(Dollars in thousands)
                         
            Elimination of        
            Suspension        
            Components        
    Superior     Business     Pro Forma  
ASSETS
                        
Current Assets
                        
Cash and equivalents
   $ 52,370     $ 15,000 (a)   $ 67,370  
Short-term investments
     36,173       —       36,173  
Accounts receivable, net
     153,915       —       153,915  
Inventories, net
     102,826       —       102,826  
Deferred income taxes, net
     7,322       —       7,322  
Prepaid and other current assets
     5,957       —       5,957  
Current assets of operations held for sale
     13,579       (13,579 )(b)     —  
 
                  
 
                        
Total current assets
     372,142       1,421       373,563  
 
                        
Property, plant and equipment
     301,214       —       301,214  
Investments
     45,856       2,000 (a)     47,856  
Other assets
     6,841       —       6,841  
Non-current assets of operations held for sale
     7,811       (7,811 )(b)     —  
 
                  
 
                        
Total assets
   $ 733,864     $ (4,390 )   $ 729,474  
 
                  
 
                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                        
Current liabilities
                        
Accounts payable
   $ 69,601     $ —     $ 69,601  
Accrued expenses
     41,797       200 (a)     41,997  
Liabilities retained
     —       361 (c)     361  
Income taxes payable
     7,589       188 (a)     7,777  
Liabilities of operations held for sale
     5,487       (5,487 )(b)     —  
 
                  
 
                        
Total current liabilities
     124,474       (4,738 )     119,736  
 
                        
Executive retirement liabilities
     19,212               19,212  
Deferred income taxes
     24,481               24,481  
Commitment and contingent liabilities
     —       —       —  
Shareholders’ equity Preferred stock, $25.00 par value Authorized – 1,000,000 shares Issued – none
     —       —       —  
Common Stock, $0.50 par value Authorized – 100,000,000 shares Issued – 26,610,191
     13,305       —       13,305  
Additional paid in capital
     24,316       —       24,316  
Accumulated other comprehensive income
     (49,189 )     —       (49,189 )
Retained earnings
     577,265       348 (a)     577,613  
 
                  
Total shareholder’ equity
     565,697       348       566,045  
 
                        
Total liabilities and shareholders’ equity
   $ 733,864     $ (4,390 )   $ 729,474  
 
                  
See notes to Pro Forma Consolidated Balance Sheet

 

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SUPERIOR INDUSTRIES INTERNATIONAL, INC.
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 25, 2006
(Dollars in thousands)
(a)   Represents the receipt of $17.0 million in total proceeds and the estimated gain on sale of the suspension components business, net of estimated selling costs and expenses and taxes as follows:
         
Cash proceeds from sale
   $ 15,000  
Promissory note
     2,000  
 
      
 
        
Total proceeds
     17,000  
 
        
Assets sold
     (21,390 )
Liabilities assumed (c)
     5,126  
Selling costs and expenses
     (200 )
Estimated income taxes
     (188 )
 
      
 
        
Estimated gain on sale
   $ 348  
 
      
(b)   Represents the elimination of net assets of the suspension components business.
 
(c)   $361 of employee related liabilities originally included in liabilities of operations held for sale were retained by Superior.
The final calculation of the gain on sale is subject to post closing working capital adjustments as of the closing date, which could result in material changes from the pro forma amounts and calculations contained herein.
(d) Exhibits
99.1   Press release, dated September 22, 2006, issued by Superior Industries International, Inc., announcing the sale of substantially all of its assets of Superior’s suspension components business located in Heber Springs, Arkansas, to Saint Jean Industries, Inc.

 

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
     
 
  SUPERIOR INDUSTRIES INTERNATIONAL, INC.
 
   
 
  (Registrant)
 
    
Date: October 4, 2006
    
 
    
 
  /s/ R. Jeffrey Ornstein
 
   
 
  R. Jeffrey Ornstein
 
  Vice President and Chief Financial Officer