SOUTHFIELD, Mich. – Superior Industries International , Inc. (NYSE:SUP), a prominent aluminum wheel supplier, has announced a strategic financial maneuver involving the refinancing of its Senior Secured Term Loan and the redemption of its outstanding Senior Notes. The company, on Thursday, revealed the upsizing of its Term Loan from $394 million to $520 million, with a new maturity date of December 15, 2028.
The refinancing effort, supported by capital from Oaktree Capital Management, L.P., and other investment firms, allows Superior to redeem the €217,050,000 aggregate principal amount of its 6.000% Senior Notes due in 2025. This redemption is set to occur according to the terms of the indenture governing the Senior Notes and is facilitated by a portion of cash on the company's balance sheet.
Superior's President and CEO, Majdi Abulaban, expressed satisfaction with the refinancing, noting its role in reducing total debt from $627 million to $521 million. Abulaban emphasized that this move fortifies the company's balance sheet and enhances financial flexibility, which is crucial for executing Superior's growth strategy and improving its competitive position, particularly following a significant transformation in its European operations.
The transaction, which aims to position Superior for profitable growth and long-term shareholder value, was advised by Centerview Partners for financial matters and Weil, Gotshal & Manges LLP for legal counsel.
This financial restructuring is part of the company's broader efforts to maintain its industry leadership in supplying aluminum wheels and to continue its innovation in light weighting and finishing technologies. Superior Industries serves the European aftermarket with well-known brands and is headquartered in Southfield, Michigan.
The information provided is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy the Senior Notes or any other securities.
In other recent news, Superior Industries International Inc. reported its Q2 2024 financial results, highlighting a decrease in net sales to $319 million, primarily due to lower aluminum costs and the deconsolidation of SPG. Despite the net sales decline, the company saw a significant expansion in adjusted EBITDA, which rose to $40 million. The company also announced a record wheel program with Volvo (OTC:VLVLY) and received an A rating from Audi in research and development. However, a net loss of $11 million was reported for the quarter.
Superior Industries also revealed plans to retire senior unsecured notes as part of addressing its capital structure. The company exited German operations and increased production in Poland, where the new Volvo EV program will be launched. Despite facing industry challenges like production declines and increased inflation, Superior Industries continues to grow and adopt premier technologies.
The company's full-year net sales for 2024 are projected between $1.35 billion and $1.41 billion, with adjusted EBITDA forecasted to be $150 million to $165 million. These recent developments reflect Superior Industries' commitment to sustained growth and profitability.
InvestingPro Insights
In light of Superior Industries International's recent financial restructuring, a closer look at the company's financial health through InvestingPro data reveals some challenges and market perceptions. With a market capitalization of approximately $87.81 million, the company's size is relatively small within the industry, which can often translate to higher volatility in stock performance. Indeed, one of the InvestingPro Tips highlights that Superior Industries' stock price movements have been quite volatile.
The company's gross profit margins stand at 7.73% for the last twelve months as of Q2 2024, which aligns with another InvestingPro Tip indicating that the company suffers from weak gross profit margins. This metric is crucial as it reflects the company's efficiency in managing its production costs and can impact its overall profitability. Additionally, the company's revenue has declined by 18.86% over the last twelve months as of Q2 2024, which may be a contributing factor to the company's stock price decrease of 19.58% over the last three months.
Despite these challenges, Superior Industries is actively managing its debt, as evidenced by its recent refinancing efforts. However, the InvestingPro Tips suggest that analysts do not expect the company to be profitable this year, and the company has not been profitable over the last twelve months. This is further substantiated by the adjusted P/E ratio of -1.02, indicating that the company is currently not generating positive earnings relative to its share price.
For investors seeking a deeper understanding of Superior Industries' financial outlook, there are additional InvestingPro Tips available on the platform. These tips may provide further clarity on the company's performance and future potential.
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