SUP - Superior Industries International Inc. (SUP) Q4 2023 Earnings Call Transcript

2024-03-07 12:16:07 ET

Superior Industries International, Inc. (SUP)

Q4 2023 Results Conference Call

March 07, 2024 08:30 AM ET

Company Participants

Majdi Abulaban - President and CEO

Tim Trenary - Executive Vice President and CFO

Conference Call Participants

Michael Ward - Freedom Capital

Gary Prestopino - Barrington Research

Mehmet Dere - Deutsche Bank

Presentation

Operator

Welcome to the Superior Industries Full Year and Fourth Quarter 2023 Earnings Call. We are joined this morning by Majdi Abulaban, President and CEO; Tim Trenary, Executive Vice President and CFO. My name is Alan. I'll be your coordinator for today's event. Please note this call is being recorded and for the duration your line will be on listen-only [Operator Instructions]. I will now hand you over to your host, Tim Trenary to begin today's conference. Thank you.

Tim Trenary

Good morning. Welcome to our full year and fourth quarter 2023 earnings call. During our call this morning, we will be referring to our earnings presentation, which along with our earnings release is available on the Investor Relations section of Superior's Web site. I am joined today by Majdi Abulaban, our President and Chief Executive Officer. Before I turn the call over to Majdi, I'll remind everyone that any forward-looking statements contained in this presentation or commented on today are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to Slide 2 of the presentation for the full Safe Harbor statement and to the company's SEC filings, including the company's current annual report on Form 10-K for a more complete discussion of forward-looking statements and risk factors. We will also be discussing various non-GAAP measures today. These non-GAAP measures exclude the impact of certain items and, therefore, are not calculated in accordance with US GAAP. Reconciliations of these measures to the most directly comparable US GAAP measures can be found in the appendix of the presentation. I'll now turn the call over to Majdi to provide a business and portfolio update.

Majdi Abulaban

Thanks, Tim. And thanks, everyone, for joining our call today to review our full year and fourth quarter results. I will begin on Slide 5. In 2023, the Superior team successfully executed on a key transformation that positioned the company as the leading global wheel solutions provider, competitively advantaged in many ways and well positioned for profitable growth. This while tackling a very challenging macro environment that weighed in on our top-line, especially in the back half of the year. The strategic action we took in our European operations and the portfolio refocus on profitability put us on track to continue to deliver operational excellence and profitable growth. While we saw continued recovery in our industry production in 2023, some of our key customers were challenged, especially our largest customer GM, which went down for the year. This was more pronounced in the fourth quarter where production amongst the Detroit 3 declined 7% due to the UAW strike. This along with actions we have taken to exit unprofitable programs in Europe to restructure our general operations as well as the slowdown in the aftermarket business in the first half of the year have weighed in on our revenues. Despite these macro challenges, value added sales was flat for the year, while we delivered strong EBITDA margins of 21%, which is in line with 2021. Our adjusted EBITDA for the year was $159 million. This was impacted by lower volumes as well as lumpy customer recoveries in the fourth quarter. Tim will provide more color on this....

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